For some faith institutions, this may look like adding solar panels to their roofs, engaging in regenerative agriculture, reducing waste, and composting at community gatherings. The goal of these efforts is to lower their direct contributions to the greenhouse gas emissions driving the climate crisis. And while these activities have met with great success, they suffer from a major blind spot: the emissions generated from faith institutions’ deposits and investments.
“Financed emissions” represent the climate pollution we create when we deposit our institutions’ cash at banks who lend it to fund fossil fuel companies, or by directing our investments toward those same companies. Until recently, it was difficult to calculate just how much carbon pollution those deposit dollars (or Euros, yen, etc.) and investments were causing. But thanks to some relatively new research, the picture is much clearer.
Last year, a group of climate organizations released a report, The Carbon Bankroll, intended to highlight the impact of corporations’ cash and investments on greenhouse gas emissions, and to reveal a new avenue for climate progress. The report presented a methodology for calculating just how much climate pollution each dollar directed to coal, oil, and gas puts in the atmosphere. The report’s findings caused the estimated greenhouse gas emissions of many companies to jump overnight. It turns out these companies, along with many of us, had not been paying attention to one of their most powerful contributions to the climate crisis: their cash and investments.
Faith institutions, too, have often unknowingly had their deposits and investments directed to fossil fuel companies. And once they account for these financed emissions, they may find out that they have canceled out any sustainability gains from their decarbonizing activities. Rather than feel frustrated or guilty, institutions can take this opportunity to engage a crucial and under-tapped lever for climate action.
In December, our organization, Dayenu: A Jewish Call to Climate Action, published With All Our Might: How the Jewish Community Can Invest in a Just, Livable Future. In that report, Dayenu analyzed major Jewish institutions’ current investments in fossil fuels. By applying The Carbon Bankroll’s methodology, we found that the subset of institutions we reviewed currently had at least $3.3 billion invested in fossil fuels. Moving these funds out of fossil fuels could have a climate impact equivalent to removing more than 500,000 gasoline-powered cars from the road every year or closing 6.5 gas-fired power plants. By providing a tangible representation of the way these institutions’ investments contribute to the climate crisis, we hope to help Jewish institutions understand the opportunity they have to take bold climate action and compel them to act.
The good news is that screening fossil fuels out of an investment portfolio is both easier than ever and a prudent financial move. Fossil fuel companies increase overall portfolio risk, by exacerbating the climate crisis and destabilizing the global economy, and have performed poorly compared to the market over the past decade. According to the Institute for Energy Economics and Financial Analysis, screening out fossil fuels and investing in clean energy and climate solutions are the best fulfillment of fiduciary duty, the obligation that boards and investment committees have to steward an organization’s assets responsibly. Moreover, it goes against our morals and our long-term financial interest to temporarily profit from a momentary spike in oil prices due to war profiteering from Russia’s war with Ukraine, especially if it means that our portfolio and the rest of the economy could lose 10% of its value by 2050.
Dayenu recognizes that taking climate action at the scale that science and justice demand requires that we stop investing in fossil fuels.To support Jewish institutions in their journeys, Dayenu developed a six-step roadmap and accompanying resources to support institutions as they screen out fossil fuels and invest in clean energy. We invite any and all faith institutions and secular partners interested in using finance as a lever for climate action to use and adapt these resources.
Once a faith institution has engaged its community in education, had a dialogue with its investment advisor or asset manager, and made the commitment to both screen out fossil fuels and reinvest in clean energy, they can officially join the 1500+ organizations representing over $40 trillion who have joined the movement to end the era of fossil fuels.
Just as faith institutions and secular partners have engaged in decarbonizing activities, like installing solar panels and composting, so too our faith values can inspire us to move our investments currently supporting fossil fuels and instead invest in a clean energy future.