This year I retired from a quarter century of teaching college geoscience. A major challenge accompanying this new venture has been making investment decisions I have little experience with. In doing so, I must, of course, protect our family “nest egg,” so we can continue to pay the bills, take care of emergencies, and help with the extended family.
But I also think a lot about the adverse impacts that our technological and economic systems are having on the natural systems we are all part of. I am concerned about what kind of future my students and grandchildren will inherit, and I want to do what little I can to protect their ecological inheritance, which is as important as protecting their economic inheritance.
Consequently, I wrestle with decisions about investments that have implications for climate change – chiefly about investments in fossil fuels. Specifically, I consider what my money supports, whether my investment choices make any real difference, and what investments would be most effective in helping create the future I want to support.
Following the money – identifying what activities my money is actually supporting – is no simple matter. Investment funds are frequently funneled into portfolios that include diverse enterprises, some of which are in line with our values, others not so much so. Even the most socially conscious funds involve compromises (such as investing in fast food industries or monopolistic technology firms). The social screen I have chosen for my own investing is to favor renewable energy technologies and to avoid fossil fuel companies. However, this choice is complicated by the fact that renewable energy technologies are sometimes developed by companies that also develop fossil fuel products.
Regarding my second consideration about my investments – whether my small choices can make any difference in the world – I remember a key lesson I’ve learned as a parent and a geoscientist: there aren’t any sure bets. Even though the impact of one middle class investor on the decisions of global enterprises might seem pretty minimal, even irrelevant, Quakers have always taken small, individual actions to grapple with huge issues – slavery, civil rights, nuclear war – because we are driven by love, faith, and vision rather than immediate results. I’ve also learned that not acting, just because an action seems imperfect or ineffectual, is a certainly a recipe for an impoverished and polluted future for our children and grandchildren. It is also a recipe for depression, apathy, and callousness in our human family today. I am acutely aware that the world is full of surprises, and to that end, my small actions count.
In considering which investments will be most effective in creating the future I want to support, I begin with an eye towards history. As a global society, our fossil fuel dependence began less than 200 years ago, and it began rapidly. Coal, oil, and natural gas provide for nearly 80% of our total energy consumption today. Turning this around won’t happen overnight. It will require a rapid switch to alternative renewable sources, as well as our becoming wiser and more frugal in how we use that energy and other resources. Obviously, we will continue using some fossil fuels as our usage tapers off. Unfortunately, fossil fuel industries are still working under a system of financial incentives to expand, rather than contract, their mining and production of fossil fuels. The question, then, is: how do we use our money to nudge these industries towards renewable sources? Responses to this question appear to me to fall into two categories: divorce (divesting of all fossil-fuel-related industries) or challenging engagement (selective investment and stockholder action). In choosing between these two strategies, I am basing my personal decisions on my sense of where my dollars will have the greatest impact and on my sense of which broad shifts in our economy seem most realistic today.
To determine where my money might have the greatest influence in the decisions of energy companies, I begin by observing that the fossil fuel industry is not a monolithic entity beyond redemption. Rather, it is a collection of enterprises, some being more progressive than others. My own experience as a geologist is that while some companies, such as Exxon-Mobil, are often so invested in fossil fuels that they actively bankroll climate disinformation campaigns, there are others, like British Petroleum, that are making efforts towards developing renewable energy resources. While the corporate world might not be a democracy, it is nevertheless dependent on the resources of investors. A major task for investors who care about environmental sustainability is for them to redirect funding away from the first group of companies and towards the latter.
When I consider how I might base my investment strategy on a realistic sense of the change that is possible today, I find myself choosing between a rock and a hard place. Given our current dependence on fossil fuels as well as the priorities that most energy-related corporations have with short-term financial gains at the expense of long-term environmental impacts, a “cold turkey” approach to ending our fossil fuel consumption doesn’t seem very realistic. However, it is unclear whether merely taking incremental steps will be sufficient to achieve the kinds of changes we would need to make in enough time to avoid the environmental and economic tipping points that loom ahead.
My sense of the intractability of this problem is based on several observations. First, fossil fuels have made possible rapid population growth and increased income for a large number of people. We rely on them. At the same time, we are using these resources at a rate that far exceeds their rate of replacement. Despite the most optimistic estimates of exploration geologists, we have consumed most of the deposits that are cheap and easy to get to. While there may be significant reserves still in the ground, we are swiftly reaching the point where acquiring these fuels could take as much energy as we would get from consuming them.
Second, overwhelming evidence suggests that our planet is swiftly approaching the limits of its resilience in the face of environmental damages caused by our dependence on fossil fuels. Mountain top removal to mine coal, clear cutting boreal forests to mine tar sands, groundwater contamination resulting from hydraulic fracturing, oil spills, urban air pollution, carbon dioxide-induced climate change, and a host of other environmental issues all point toward a future of environmental and economic devastation.
Third, although fossil fuels have made possible incredible prosperity, it is questionable whether that prosperity will continue into the future. Some rather reputable folks think it will not (e.g. the International Panel on Climate Change and Stanford’s School of Earth Science). They argue that if we continue consuming fossil fuels at ever increasing rates, the ever-increasing costs of dealing with accelerating climate change and the escalating costs and environmental impacts of new extraction will seriously destabilize both our ecosystem and the global economy within this century. As a geoscientist, I find their arguments uncomfortably realistic and probable.
Given my sense of where we are in history, of the variability among corporations in their practices of environmental responsibility, and of the difficulty I have in imagining any swift path forward to environmental sustainability, I have decided to take the “challenging engagement” approach to investing for now. I practice stockholder activism by investing in mutual funds that hold stock in emerging renewable energy firms and also hold stock in fossil fuel companies that are seeking to diversify. This is not a perfect solution. I am not recommending it to other investors, especially since I’m a relative neophyte at investing. Nor is this an approach something that I plan to stick with for all time. It’s an experiment that involves trying to find a balance between personal needs, family responsibilities, the realities of our current technological civilization, and my responsibilities to both the larger human community and our natural community.
Whichever way the experiment comes out, I intend it as an act of respect and faith – respect for the divine creativity weaving the natural fabric we are all part of, and faith that says it is possible and necessary to leave our children a world that is at least as wondrous and richas we found it.
Frank Granshaw is active in ecumenical efforts to increase public understanding of climate change. He is a member of Multnomah Monthly Meeting in Portland, OR (NPYM).
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