What socially responsible investing can accomplish

LOUISVILLE — Two experts in socially responsible investing led a webinar last week for Vermont Interfaith Power and Light, looking at ways individuals, congregations and other institutions seek to care for Creation by directing where their investments, bank accounts and credit cards are held.

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Webinar presenters were Craig Walker, a socially responsible financial advisor with Greenvest and a lifelong Vermonter, and the Rev. Jim Antal, a pastor in the United Church of Christ, climate activist and author.

Socially responsible investing is also known as sustainable investing; ESG, for Environment, Social and Governance; impact investing; values-based investing; and green investing. Walker prefers the term socially responsible investing. Advisors in that line of work “take your values, the issues that matter to you, and try to harmonize that with where your investments are placed,” Walker said.

“It’s also about what socially responsible investors can do collectively as a force for social change and good,” such has helping to end Apartheid in South Africa in 1994. “That’s collective action at work,” Walker said.

Investors can engage in both negative screening, “where you weed out offensive companies,” he said, and positive screening, including reinvesting in green businesses and communities, often called impact investing.

The Presbyterian Church (U.S.A.) and other denominations screen investments by industry, excluding weapons, tobacco, publicly traded for-profit prison companies, and some fossil fuel companies, for example. General Assembly divestment action by the PC(USA) and its forebears goes back to 1982.

Walker asked the central question: Why divest?

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“Beyond the moral imperative, as an investment sector it’s increasingly about risk,” Walker said. Energy companies around the world face government regulation and lawsuits. They also face increasing competition from greener companies.

The website fossilfreefunds.org offers free information to people interested in divesting from fossil fuel companies, Walker noted. As recently as 2008, only a half-dozen or so companies offered screened mutual funds, exchange-traded funds and bonds. Now there are thousands, Walker said.

Investors can go it alone or select a financial advisor or firm to help them with socially responsible investing. “We tell everyone that if you want to do it, it’s 100% possible,” Walker said. “It just requires some work and dedication.”

Antal noted that when Nelson Mandela was released from prison in 1990, among the U.S. places he visited in order to thank them were cities and universities that had divested from doing business in South Africa. “Divestment,” Antal said, “played a central role.”

Fast forward to August 2012, when Bill McKibben wrote a cover story for Rolling Stone proposing that individuals and institutions divest from fossil fuel corporations. “It became the most widely read article in the history of Rolling Stone Magazine,” Antal said. “It was also met with ridicule, incredulity, mockery and laughter.”

Since that article was published, portfolios worth more than $40 trillion “have purged their holdings of fossil fuel stocks,” according to Antal, and faith institutions make up 35% of the more than 1,300 institutions that have divested so far. The 226th General Assembly (2024) directed the PC(USA)’s Committee on Mission Responsibility Through Investment to identify the top 10 fossil fuel companies that derive most of their profits from the exploration, development and production of fossil fuels and immediately divest from those companies, but reversed course on an earlier vote for complete divestment.

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Antal said that for the past 14 years or so, the focus of the climate movement has shifted from the demand side to the supply side. “Those efforts to renew and recycle and reuse remain critically important,” Antal said. But beginning in the summer of 2011, efforts shifted to halt construction of the Keystone XL pipeline, a project former President Joe Biden shut down by denying a key permit in 2021.

Antal offered six responses to the key question, why divest?

• Because if it’s a sin to wreck Creation, then it’s a sin to profit from wrecking Creation, in the words of Ecumenical Patriarch Bartholomew, who’s known as the “Green Patriarch.” As Antal put it, “Once we accept we are morally responsible for how we use our money, we can no longer profit from owning shares in financial companies, and we’re morally compelled to divest.”
• To revoke “the social license fossil fuel companies need to continue their business-as-usual practices” that Antal said “are wrecking the Earth.”
• Because “we need to keep it in the ground,” he said, what’s referred to in the energy business as “stranded assets,” or keeping oil, coal and gas where they are.
• Don’t divest “so that you can claim moral purity,” Antal said. “When it comes to issues of energy, ecology and economics, there’s no such thing as moral purity.”
• What we do with our assets matters, and Antal says it’s “all our assets — your voice, your body, your circle of influence and your friends, our legal system, your financial assets, your time and career, and your vocation.”
• For half a century, fossil fuel companies have buried scientific studies they’ve paid for. At present, nearly one-fourth of the members of Congress are climate change deniers, Antal said, adding, “This is what moral bankruptcy looks like.”

Antal also shared responses to some common criticisms of divestment. To those who say it’s never worked as a strategy, Antal gives them the Mandela example cited above.

Some say divesting means “you give up your moral leverage to help make a company do the right thing.” When the divestment movement got going in 2012-13, “it was true that if you sold your fossil fuel stocks, someone else would buy them and the company would not be hurt,” he said. “But now that portfolios worth more than $40 trillion have purged their holdings of fossil fuel stocks, institutional and individual investors now recognize that fossil fuel stocks are no longer a sure bet.”

Still others will say that “the stocks I or my church own are only a tiny portion. But when you divest your meager holdings,” Antal said, “your action is joined with thousands of institutions and tens of thousands of individuals. Some would say that you can’t have a balanced portfolio without fossil fuel stocks. But obviously this is no longer true.”

These days, about 1 in 3 dollars invested worldwide were done in a socially responsible way, Antal said. The figure in the U.S. is slightly higher.

“There has been a national political imperative because people feel like the national government is not riding to the rescue [to deal with climate change], and so we need to do it ourselves,” Antal said. “Things have gotten mainstream now.”