Commitment to Sustainability
Throughout 2020, IMANA will roll out a comprehensive sustainability plan that dedicates resources towards reducing our carbon footprint. Our commitment to greening the entire organization includes shifting to more energy efficient building operations at our office headquarters, offsetting international flights for Islamic Medical Relief missions by planting trees, and contracting with eco-conscious caterers for large events following the end of social distancing later on in 2020, insha’Allah.
For more information on how you can green your private medical practice, or assist a larger medical facility with sustainability efforts, please see our office sustainability resource guide.
IMANA’s investment committee has made the decision to divest IMANA’s endowment fund from all fossil fuel companies. Human activities, especially the burning of dirty fuel sources, are the primary causes of climate change. Like the coronavirus pandemic spread to humans from the exploitation of wild animals caged in close quarters, overconsumption fueled by the exploitation of resources from the Earth has led to an extreme planetary imbalance. Individuals, organizations, and businesses acting in concert to collectively divest from fossil fuel companies is an important step toward increasing attention toward the urgency of the climate crisis and building a healthier future for all of creation. We need to flatten the climate curve.
According to the Union of Concerned Scientists, fossil fuel corporations have known about the harmful effects of carbon emissions, including climate change, for at least forty years. Additionally, many of the largest fossil fuel companies have spent hundreds of millions of dollars on campaigns designed to intentionally deceive the public by downplaying the risks associated with extraction and consumption of fossil fuels, including shifting responsibility for any planetary loss to individual consumers. These companies have also donated large amounts of money to state and federal officials and academic institutions to curry favor and blunt political momentum from the scientific community sounding the alarm bell about the devastating effects of climate change. You can learn more about the history of the fossil fuel industry’s disinformation playbook here.
History of Fossil Fuel Divestment
One peer-reviewed study published in Climate Change estimates that fifty investor-owned carbon producers alone were responsible for roughly 16% of the global average temperature increase from 1880-2010. Scientists have estimated that nearly two-thirds of all known fossil fuel reserves must remain in the ground if the planet is to have a chance at meeting the 1.5 degree target set at the Paris Climate Summit in 2015, which IMANA has set as its target as well. As a result, public interest groups, academic institutions, religious groups, and conscious consumers are actively holding the fossil fuel industry accountable through a variety of channels, including legal action. In 2010, directly citing the success of the anti-apartheid movement tactics in South Africa, divestment emerged as one of the most accessible and effective strategies for addressing the climate crisis, by simultaneously defunding the fossil fuel industry and raising awareness about the devastating impacts of carbon emisisons.
The Moral Argument
According to a 2019 statement from the Fiqh Council of North America (FCNA), Islamic perspectives supporting the divestment from fossil fuels stem from Qur’anic guidance and the corresponding Maqaasid al-Shariah, or the objectives of Islamic Law. The primary purpose of Islamic law is to protect (in order of importance) faith (din), human life (nafs), lineage (nasl), intellect (aql), and private property (mal). FCNA scholars argue that since the avoidance of harm takes priority over the attainment of some benefit, and applying this standard to humans and non-humans in both the present and future, failure to deal with the known dangers of the climate crisis would undermine the key objectives of Maqaasid al-Shariah, including life itself.
The Long-term Investment Argument for Divestment
In addition to moral and religious arguments for divesting from fossil fuels, an increasingly large chorus of analysts are warning investors about the clear financial risks of holding on to investments related to the fossil fuels industry. This list even includes former World Bank President Jim Yong Kim (2012-2019).
In 2018, The Institute for Energy Economics and Financial Analysis said:
“The fossil fuel sector is shrinking financially, and the rationale for investing in it is untenable…In short, potential returns on coal, oil, and gas equities are no longer worth the risk.”
A few primary factors underpin financial analysts’ recommendation to divest. First, the confluence of pure financial risk, technology and innovation risk, government regulation and policy risk, and litigation risk, are growing. Additionally, fossil fuel market valuation is based upon unrealistically high future markets. For example, the price of future barrels of oil captured through reserves inflates the real price of the company due to government regulations limiting carbon emissions, leaving assets stranded and losing value, referred to as “stranded assets”. Finally, the fossil fuel industry’s financial performance is in decline. Finally, according to the MSCI AXWI Fossil Fuels Index, over the past few years global stock indexes without fossil fuel holdings have outperformed otherwise identical indexes that include fossil fuel companies.
Muslim and Other Religious Communities’ Commitment to Divestment
As of late 2019, 1,100 institutions possessing 11 trillion dollars have divested from the fossil fuel industry. Hundreds of faith-based institutions, including entire religious orders, such as the Church of England (which includes the American Episcopal Church) and the Methodist Church, have also pledged to divest from fossil fuel companies.
In 2015, Islamic Relief Worldwide, Islamic Foundation for Ecology and Environmental Sciences, and GreenFaith facilitated the release of the Islamic Declaration on Climate Change in Istanbul, Turkey. Signed by Islamic scholars and political leaders from around the world, the declaration inspired concrete action, including the Islamic Society of North America pledging to divest from fossil fuel companies.
Options for Divestment
Over the past five years, financial planners have significantly increased the number of options available to institutions and individuals looking for profitable and environmentally responsible investments. In addition to applying Shariah-compliant standards, firms provide various types of environmental filters for clients to select.
Although part of the reinvestment process includes considering renewable energy companies, there are many ways for investors to make environmentally responsible choices that diversify an institution’s portfolio and strengthen the chances of substantial returns. Energy efficiency, storage and distribution, transportation, water, sustainable design, and sustainable agriculture are all areas to consider.
The fiduciary responsibility of the IMANA Investment Committee has been front and center throughout this process, and many factors have been taken into consideration when making this decision. Based upon the Committee’s review of Islamic principles and scholarship on divestment, the financial success of environmentally-conscious investments, and IMANA’s mission as a public health-focused organization that provides critical medical services to those most in need and who are often impacted by climate-induced disasters, we are confident in our decision to divest all fossil fuel companies from our endowment portfolio. We encourage both Islamic institutions and individuals to consider similar financial decisions, and encourage our network to consult ethical investment professionals for additional information.
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IMANA is a registered 501(c)(3) nonprofit organization. All donations to IMANA and IMANA Medical Relief are tax exempt. Tax ID: #36-4166125