By the end of 2014, the Franciscan Sisters of Mary (FSM) removed from its investment portfolios all securities issued by public companies that produce fossil fuels—including oil, gas, and other consumable fuels.
Living Our Values in Caring for Creation
“Both producing and consuming fossil fuels damage the Earth and the creatures who live here,” said Sr. Rose Mary Dowling, 2007–2015 president of the Franciscan Sisters of Mary. “Extracting those fuels destroys the regions where they are harvested, and the air and water pollution caused by refining and burning them have a huge impact on greenhouse gases and climate change—not to mention the devastating effects on the health of people and other creatures in those areas.
“We can’t in conscience continue to support companies that destroy the Earth when we could be investing in those that are providing the structure, products and services we need for a society based on sustainable, clean energy. Wind power, solar power—we see the range of sustainable solutions growing every day. It’s time to help create the future we’d like to see.”
The Mechanics of Divesting
At the same time FSM made the decision to divest, an equity manager shift was taking place that proved removing stocks of fossil fuel producers like Exxon Mobil, Chevron, and EOG need not detract from an investor’s returns.
Aperio Group is an asset manager that applies a customized indexing approach to portfolio management. FSM’s history of using an “active management” approach to equity investing had long proven unsatisfactory. Aperio’s advanced processes and sophisticated technologies allowed FSM to create multiple stock portfolios that, while syncing with FSM’s expanded exclusionary screening, replicated selected market indices (e.g., Russell 1000 for US large caps, S&P 600 for US small caps). Since then and as designed, actual returns from these portfolios have very closely tracked those corresponding indices.
For FSM’s fixed income and real estate portfolios, the expanded screening had no material impact for its portfolio managers.
Taking the Divest-Invest Fuel Change Pledge
We encourage others to take the Divest-Invest Fuel Change pledge, joining many other institutions and individuals who are moving away from dependence on fossil fuels and switching to clean energy investments.
Since its beginnings in January 2014, the Divest-Invest Philanthropy movement has grown exponentially. As of December 2016, 688 institutions and 58,399 individuals across 76 countries and representing $5.2 trillion in assets had committed to divest from fossil fuel companies. Foundations, colleges, health and pension funds, religious organizations, and many others have made the pledge to drop coal, oil, and gas industries from investment portfolios.
Many organizations, companies and individuals who have committed to divest are also committing to invest in climate solutions—clean renewable energy, green technologies and services, sustainable agriculture and forestry, local businesses, and meaningful action to curb climate change and protect those most vulnerable to the devastating effects of global warming.
Having completely divested from fossil fuel industries, FSM is actively investing some $10 million of our assets into environmental detoxification, sustainable agriculture and forestry, renewables and energy efficiency, in areas close to home and as far away as Latin America, Asia and Africa.
Divesting from fossil fuel industries and reinvesting in sustainable energies fueled by sun, wind and water allows companies and institutions to focus on a triple bottom line, simultaneously meeting financial, environmental, and socially responsible goals.