Climate Crisis

Climate Crisis

Overview of issues

Responsible stewardship of our planet as God’s creation is embedded in all faith traditions. Seventh Generation Interfaith (SGI) embraces the words of Pope Francis, “On climate change, there is a clear, definitive and ineluctable ethical imperative to act.” President Obama stated that “no challenge poses a greater threat to future generations than climate change.” The United States was instrumental in bringing 195 nations together to sign the Paris Climate Accord.

Investors’ interest in the climate crisis stems not only from their fiduciary concerns regarding the real and immedi­ate risk climate change poses to their own institutional assets and reputation, but from their con­cerns about its broader and longer term ramifications on global economic stability. For faith-based investors, these concerns take on a distinctly human dimension as they consider the justice implications for vulnerable communities who, due to their resource constraints, will disproportionately bear the impacts of the climate crisis.

Corporate engagements call for the measurement, disclosure and reduction of GHG emissions including the setting of quantifiable, science-based and time-bound reduction targets. Engagements also focus on the “carbon asset risk” of current and untapped reserves as well as new investments in fossil fuel exploration in light of impending climate regulation that will likely render these reserves unburnable.  Understanding its importance in driving the energy transition, ICCR members actively support climate legislation and regulation and seek greater disclosure around companies’ lobbying and political activities to ensure that they are consistent with stated policies on environmental issues.

Some advocacy groups such as 350.org have approached universities and faith-based organizations promoting divestment of fossil fuel companies. These movements have gained media and general public attention helping to bring attention to this societal challenge. ICCR supports a hybrid approach. In a position paper, Invested in Change: Faith-Consistent Investing in a Climate Challenged World, they recommend that members “continue to hold and engage companies where climate change mitigation is critical, screen out or divest when companies either prove recalcitrant or pose excessive portfolio risks, and proactively invest in opportunities that will address the current climate crisis.” SGI is also a signatory to the Statement of Investor Commitment to Support a Just Transition on Climate Change.  

Corporate engagement on ESG issues is not easy and takes years of persistence. Some say that it’s a waste of time trying to convince fossil fuel companies to transform their business model and admit that a majority of their reserves cannot be burned if the 2 degree target is to be met.

However, we have had small victories along the way. In 2015, Shell and BP supported shareholder resolutions on climate change risk assessment resulting in > 95% shareholder support. Shell Oil has publicly stated that they believe oil demand will peak in the coming decade. After years of climate denial, Exxon Mobil finally admitted that human activity has been a leading cause of climate change. In response to a resolution led by the St. Joseph Province of the Capuchin Order, Exxon Mobil added a scientist with expertise in climate studies to its Board of Directors. In a recent speech, Shell Oil’s CEO strongly supported the Paris agreement calling for “governments to put in place the right policies, driving action on the supply and the demand side”, including carbon pricing mechanisms, to “speed up investment in low-carbon technologies and ― at the same time ― move consumer demand away from high-carbon energy and energy intensive products.”

SGI’s engagement

SGI members have been engaging corporations on climate change since the mid-1990’s to better manage risk and capture opportunities of a low carbon economy. Topics include cutting greenhouse gas (GHG) emissions, advancing the use of clean energy, reducing climate change impacts in their supply chain, and protecting the safety of those most impacted by climate change. Recent efforts have focused on science-based GHG reduction targets, board expertise, and supply chain deforestation impacts.

SGI Shareholder Resolutions

Resources