A decade ago, in his encyclical, the Laudato Si', which translates to 'Praise Be to You', Pope Francis spoke of the urgent need to develop policies to reduce greenhouse gas emissions and move "progressively and without delay" away from technology based on the use of polluting fossil fuels.

Five years later, the Vatican issued a recommendation to "promote ethical, responsible, and integral criteria for investment decision making, taking care not to support companies that harm... environmental ecology (for example, through the use of fossil fuels)."

By now, 1,600 global institutions — from healthcare providers to pension funds and NGOs — have pledged to sever financial ties with major fossil fuel companies. Of those, 384 are known to be Catholic. But James Buchanan, climate finance campaign manager with the Laudato Si' Movement, says that may not paint a full picture. 

"It isn't possible to give the total amount divested by faith institutions, as they generally prefer not to disclose this information publicly," he said in an email to DW.

Among those who have been open about their intentions is Germany's Catholic Bank für Kirche und Caritas eG (BKC). It was among an international coalition of 40 church institutions that made a 2017 pledge to gradually divest entirely from the fossil fuels that are driving global temperature rise.

Although the bank has not achieved full divestment yet, Tommy Piemonte, head of sustainable investment research at BKC, says they are well on their way.

Motivated in part by Pope Francis' encyclical, the bank also advocates for other institutions to decouple from emissions-intensive fossil fuels. 

"We feel a strong responsibility — not only toward our customers and ourselves — to contribute to climate protection, or at the very least, to avoid worsening climate change," Tommy Piemonte told DW. 

The Pax-Bank, another Christian German finance institute, made a partial commitment to divest in 2018, by gradually reducing revenue thresholds for permissible shares in oil, gas and coal. 

"We also measure the CO2 emissions of our portfolios," head of asset management, Gregor Kuhl said. "And, in some approaches, the willingness of companies to transform.”

Does divestment go far enough? 

While moving away from fossil fuel investments sends a message, Tommy Piemonte says it is only part of the puzzle. 

"It's also crucial to ensure that funds are directed towards the right areas, such as climate protection and adaptation," he said.

In keeping with that thinking, he says the BKC prioritizes investment in companies that "perform well from a sustainable perspective" and excludes those that don't align with their climate protection investment strategy.

The BKC also invests in "green bonds”, which are used to fund environmentally sustainable projects. 

Michael Dittrich, head of finance and administration of the nonprofit German Federal Environmental Foundation (DBU), says green bonds have become more attractive in the market since the Paris climate accord was agreed in 2015. 

"By purchasing green bonds, you're directly supporting the company in its transformation process," he said. 

Some Catholic institutions also seek to put pressure on fossil fuel companies to change their policies through shareholder engagement. So, while they might continue to invest, they use platforms such as shareholder meetings to push for more climate-responsible behavior, such as reducing emissions.

James Buchanan says some Catholic institutions still favor shareholder engagement with oil and gas companies over divestment — out of the desire to influence change through dialogue. But research published last year by German environmental and human rights NGO, Urgewald, estimates that more than 90% of oil and gas companies are continuing to explore and develop new reserves across the world.  

"From our perspective, while we acknowledge the efforts of institutions that have been pursuing engagement, unfortunately the oil and gas companies have not responded to that," Buchanan said. "And so at that point we believe that fossil fuel divestment is the best strategy and approach."

Profit over principle?

Despite papal calls and the social teachings of the Catholic church, Buchanan says each institution — whether a diocese or Catholic religious order —  has the authority to make its own investment decisions.

And countless faith-based institutions do put their money in oil and gas companies. Which Tommy Piemonte says is ultimately about the money. 

"In short, the reason many continue to invest in fossil fuel companies is profit," he said.

But investing in fossil fuels doesn't always lead to consistent profits. Claudia Kemfert, an economist and energy expert at Berlin's German Institute for Economic Research (DIW) says greener alternatives — such as renewable energy, green hydrogen, batteries and electric mobility — currently offer long-term investors a more positive and stable outlook than fossil fuels. 

"Where the financial risks occur more from being involved in fossil fuel investments — because right now we see strange market impacts — are some fossil energy conflicts," Kemfert said.

"And the other advantage is that you are not investing in climate change technology, because burning fossil energy is causing climate change."

She notes that divesting gradually and moving to low or zero-emission technologies could ultimately also contribute to structural change.

Will the Pope's green legacy endure?

With each of the past ten years among the hottest ever on record, with 2024 becoming the warmest yet, Buchanan believes that Pope Francis' call for divestment from fossil fuels will remain relevant as it is central to the Church's social teachings. 

"I think the priority now is for Catholic institutions to take up this call from Pope Francis and act on it. And one of the most important ways they can do this is by divesting from fossil fuel companies," he said.

Edited by: Tamsin Walker 

This article has been amended to correct a factual error stating Pope Francis called for divestment in his 2015 encyclical. In that letter, he spoke of the need to progressively move away from fossil fuels.