Introduction
Divest for Sustainability,
Invest in our Common Home
The Paris Agreement in 2015 highlighted the need for global collaborative action to limit the increase in global average temperature to 1.5°C relative to pre-industrial levels by 2030 to avoid further catastrophic damage. One way to achieve this goal is to reduce the global net human-made carbon dioxide (CO2) emissions. The Philippines formally ratified the agreement in March 2017, commiting to reduce emissions by 70 percent below projected levels by 2030.
In the country, coal-fired power plants contribute much to the release of CO2 in the atmosphere. The burning of these fossil fuels is the primary cause of the release of greenhouse gases (including CO2) into the atmosphere, which accelerates the planet’s warming. And yet despite this, construction of more coal-fired power plants continues to be financed by the biggest banks in the country.
“The climate is a common good, belonging to all and meant for all. At the global level, it is a complex system linked to many of the essential conditions for human life. A very solid scientific consensus indicates that we are presently witnessing a disturbing warming of the climatic system. … The problem is aggravated by a model of development based on the intensive use of fossil fuels, which is at the heart of the worldwide energy system.”
Laudato Si’ 23
Data has shown that BDO, BPI, and Metrobank collectively provide 70 percent of the funding for big coal companies in the country. Financing the operations of existing and future coal-fired power plants and coal mining activities needs to be stopped immediately to avoid catastrophic consequences associated with the climate crisis.
By the Numbers
Philippine Context
Despite being most at risk, the country continues to depend on coal for our energy needs. The biggest banking institutions in the country provide up to 70% of the funding for big coal companies.
16 coal-fired plants
There are 16 new coal-fired power plants added to the Philippine national coal fleet in the last decade.
9th biggest coal expansionist
As of September 2019, the Philippines ranks as the ninth biggest coal expansionist in the world, out of 60 countries still becoming more reliant on coal.
PHP 320 billion in coal power
In June 2019, the Catholic Bishops Conference of the Philippines (CBCP) published a pastoral letter recognizing the urgency of the climate crisis. Inspired by the second encyclical of Pope Francis known as the Laudato Si’, it called for an ‘ecological conversion’ in all dioceses, parishes, and ecclesial communities as a response to the need to take care of our common home.
This ecological conversion is rooted in the recognition of the Rights of Nature; these are principles based on how human beings are a part of the environment and that any attack on it is an attack against humanity. Given the current state of our world, there is a need to reestablish our connection to others; as everything is interconnected with each other, we have a moral obligation to assist those in great need yet have little in resources and capacity.
“We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay.”
Laudato Si’ 165
Currently, a significant portion of the finances of Catholic institutions are invested in major Philippine banks. However, data has shown that BDO, BPI, and Metrobank collectively provide 70 percent of the funding for big coal companies in the country. Continuing to finance ventures that lead to further environmental degradation and the suffering of millions is contradictory to the fundamental mission and vision that Catholic institutions are meant to represent and embody.
Under the CBCP’s pastoral letter, Catholic institutions in the Philippines are being called for its financial resources “to be invested in favor of coal-fired power plants, mining companies and other destructive extractive projects” and that “divestment from such investment portfolios must be encouraged”. It also calls for practices constituting an “indirect” divestment, wherein citizens can live a lifestyle that respects nature and discourages support for harmful environmental practices.
Divestment
What is divestment, and why?
In the context of the climate crisis, it is centered on pressuring companies to shift their financial instruments away from endeavors related to the extraction and use of fossil fuels, especially coal.
Pressuring businesses to divest from fossil fuels and invest in renewable energy development would reduce greenhouse gas emissions.
This would significantly contribute to limiting global warming to well below 2°C, as specified under the Paris Agreement; and achieving the UN Sustainable Development Goals, especially SDGs 7 (Affordable and Clean Energy) and 13 (Climate Action).
More markets are classifying fossil fuel reserves as environmentally unsustainable, which can make them stranded assets.
This increases the risk of investing in fossil fuel-related endeavors, which would make them more unprofitable.
“Now is the time to abandon our dependence on fossil fuels and move, quickly and decisively, towards forms of clean energy and a sustainable and circular economy. … Our prayers and appeals are directed first at raising the awareness of political and civil leaders… [who should] renew commitments decisive for directing the planet towards life, not death.”
World Day of Prayer, 1 September 2019
Renewable energy is already cost-competitive worldwide.
Current trends in the improvements in existing technologies and market preferences would make renewable energy more competitive, which would lead to the loss of value for fossil fuel-related businesses and projects.
We have a moral obligation and responsibility to take care of our environment, regardless of our political or religious affiliations.
We do not own Nature; we are a part of it. Letting our financial assets to be knowingly invested in fossil fuel-related businesses and endeavors, especially coal, makes us contributors to climate change, environmental degradation, and social injustice.
In Action
Divestment in action
Divestment is possible. More and more stakeholders worldwide are recognizing the moral and financial obligation to phase out coal from their portfolios to adequately address the climate emergency.
USD 12 trillion divested from coal
As of December 2019, over USD 12 trillion has been divested from coal, oil, and natural gas through the commitment of 1200 institutions and 58 thousand individuals for more sustainable use of their funds.
22000% increase in divestments
There has been a 22000% increase in divested assets from fossil fuels in the past six years—the most rapid growth of the divestment movement in history.
Zero coal tolerancea
French insurer AXA established a benchmark for best climate policies with zero coal tolerance, which excludes 400 coal-exposed companies in its finance portfolio, and with time-bound plans to phase out its coal exposure.
No financing for coal after 2021
The European Investment Bank, the world’s largest public bank, committed to phase out its multi-billion financing for coal, oil, and natural gas after 2021.
Faith-based institutions divest
Fossil fuel divestment does not just apply to corporations and banks. In fact, out of the 1200 institutions that have committed to withdraw from dirty energy, 30 percent of them are faith-based institutions.
150 Catholic institutions
Nearly 150 of these are Catholic institutions—dioceses, churches, educational institutions, philanthropic foundations, and non-government organizations in various degrees. Four of them are from the Philippines.
Participate
What is indirect divestment, and how do I participate?
While “indirect divestment” usually refers to divesting from financial institutions or companies that invest in fossil fuel companies such as banks, it does not take into consideration the involvement of stakeholders who do not have any representation in said entities.
Despite their lack of direct representation among the shareholders or depositors, the potential impacts of the businesses in which these institutions invest on communities and ecosystems signify that these stakeholders must influence the divestment process.
“We live at a time when profits and losses seem to be more highly valued than lives and deaths, and when a company’s net worth is given precedence over the infinite worth of our human family.”
“Climate Change and New Evidence from Science, Engineering and Policy”
Examples of actions that contribute to indirect divestment include, but are not limited to the following:
- Switching your energy source from fossil fuels (i.e. coal, oil, natural gas) to renewable energy (i.e. solar, hydro, wind, biomass, geothermal)
- Reducing energy consumption;
- Using energy-efficient appliances and equipment;
- More efficient and less wasteful water consumption;
- Reducing purchase and consumption of products, goods, and services to reduce generated waste;
- Reusing and/or recycling materials;
- Riding in public transportation;
- Riding in non-motorized transport (e.g. bicycles) or walking (for short distances);
- Carpooling;
- Improving the ventilation at home or work;
- Wearing attire more suitable for weather or climate experienced in your area;
- Tree-planting and growing;
- Growing your own food through backyard gardening or single-plant pots;
- Using your own food and water containers and reusable utensils; and
- Using your own bags when purchasing goods.
Examples of actions that contribute to indirect divestment include, but are not limited to the following:
- Switching your energy source from fossil fuels (i.e. coal, oil, natural gas) to renewable energy (i.e. solar, hydro, wind, biomass, geothermal)
- Reducing energy consumption;
- Using energy-efficient appliances and equipment;
- More efficient and less wasteful water consumption;
- Reducing purchase and consumption of products, goods, and services to reduce generated waste;
- Reusing and/or recycling materials;
- Riding in public transportation;
- Riding in non-motorized transport (e.g. bicycles) or walking (for short distances);
- Carpooling;
- Improving the ventilation at home or work;
- Wearing attire more suitable for weather or climate experienced in your area;
- Tree-planting and growing;
- Growing your own food through backyard gardening or single-plant pots;
- Using your own food and water containers and reusable utensils; and
- Using your own bags when purchasing goods
#LS211
Nine (9) doable and effective ways on how to show our love and care to our common home
Laudato Si’ Schools
A framework based to be integrated in the strategic plan of Catholic schools.