“The kingdom of heaven is like treasure hidden in a field, which a man found and hid; and for joy over it he goes and sells all that he has and buys that field.” Jesus of Nazareth (Matthew 13:44)
Twelve years ago, Rev. Jim Ball and Evangelical Environmental Network launched a campaign with a clever catch-phrase: “What would Jesus drive?” A few months later, he climbed into his blue Prius hybrid for a tour of the Bible-belt, speaking to churches in 14 cities, and winding up on Diane Sawyer’s Good Morning America.
“We wanted to have people start to think of their transportation choices as moral choices,” said Ball, “and to a certain extent we succeeded.”
Today, efficient vehicles are widely seen as a component of ethical living, and the U.S. is on the way toward implementing a 54.5 mpg vehicle efficiency standard.
And additionally, people all over the country are also beginning to ask a related question: “What moral choices are reflected by the investment of our savings?” For Christians, perhaps, “What would Jesus invest in?”
Of course, the Bible provides abundant guidance on matters of money. But for a moment let’s focus on Jesus’ one-sentence parable often called “The Hidden Treasure,” about gold discovered buried in a field. Yes, the treasure is hidden, but not hidden from you. You know it’s there, and you’re willing to sell your heirlooms, real estate, livestock or anything else of recognized value in order to capture the hidden riches.
Now maybe you’ve always thought of this parable in purely spiritual terms. If so, you were probably right. But the parables of Jesus make sense because they call upon tangible everyday realities to illustrate transcendent truths. And the tangible reality of investing is that most buyers and sellers don’t know how to properly value things. They miss the hidden value – or the hidden liability. They might know the value of a farm field, but they don’t know about the gold buried there. And sometimes what’s hidden is not treasure, but toxic liabilities.
It turns out that Jesus’ investment thesis has taken center stage in today’s very largest companies – the huge fossil fuel giants that dominate our stock markets these days – ExxonMobil, Shell, BP, Chevron and the like. And that’s because these companies derive their value mainly from their “proven reserves” of oil, gas and coal. The idea is this: An investor who buys shares in these companies is really buying a tiny slice of the value of the fossil fuels they’ve discovered and locked down under leases. The investor will make a profit if what he or she pays for the stock is reasonably in line with the income that the fuel reserves will generate when produced, refined and delivered to market over the next decade or two.
And these companies have huge reserves. The 200 largest fossil fuel companies control proven reserves containing 2,795 gigatons of CO2 locked inside them from millions of years of natural processes – and that’s not counting unconventional fuels like Canada’s tar sands or America’s shale oil. 2,795 gigatons. Now here’s the problem: climate scientists have concluded that we can’t afford to burn any more than 652 gigatons of CO2 between now and 2050, if we want to leave our children a fighting chance of having a world no more than 3.6 degrees Fahrenheit hotter than it was in the last century.
Now, 3.6 degrees hotter will be terrible, but if we want it to be no worse than that, then 652 gigatons of CO2 is all that the whole world can burn.
So whatever a gigaton of CO2 might look like, you do the math: The world’s oil companies have enough proven reserves on their balance sheets to burn 2,795 gigatons into the atmosphere. But the world can only afford to let them produce 652 gigatons’ worth, or we cook our children’s future. That means that 77 percent of proven, controlled, leased reserves of oil, gas and coal of these companies have to stay in the ground. The International Energy Agency puts the leave-it-in-the-ground percentage slightly lower, at two-thirds. The World Bank now calls these reserves “stranded assets,” and frets about pensions invested in those companies.
And, oh by the way, it follows that all current exploration and development for new fossil-fuel reserves is nothing but wasted money. Unless, of course, the oil companies are willing and able to somehow fundamentally destabilize the world our children will inherit, and if we let them use their enormous wealth to purchase the support of politicians who will permit it.
But whatever you think of human nature, you probably don’t think that the world will actually condemn its children – and all the world’s other species – to a future of increasingly prevalent hunger, drought, ocean acidification, flooding and species extinction. With each passing year, rising CO2 concentrations accompanied by rising temperatures and increasingly extreme weather will surely make climate denial less and less tenable.
So just how much longer can we imagine that the world’s nations will permit fossil fuel companies to continue producing the thing that threatens the viability of life on our planet? Perhaps we will blow through the scientific carbon budget and make the world a terrifying 3.6 degrees hotter. But do we really think that we’ll do that three or four times over, by producing all the the proven reserves of these companies?
And that brings us to a very practical investment question: Since it simply must be that the people of the world will eventually fight back against fossil-fuel carbon pollution, who would invest in a company whose investment model calls for producing roughly three times more carbon pollutants than the world can possibly permit?
I think that Jesus’ parable of “The Hidden Treasure” is speaking more clearly than ever today. Investors are looking for hidden value; and are increasingly wary of hidden liabilities. In the case of oil, gas and coal companies, the hidden truth is becoming clearer day by day: Investors are being asked to pay for reserves that are indeed in the ground, but simply cannot be produced without dire consequences to the world and its creatures, including humans. And the more this reality sinks in, the further their values must plummet.
So if you’ve wondered about those people demanding divestment from fossil fuels in their portfolios, perhaps this is one instance where ethical investing and profitable investing line up nicely.
What would Jesus invest in? I can’t say I know for sure, but I don’t think it would be ExxonMobil.