Voice Through Divestment

Marco Becht, Anete Pajuste and Anna Toniolo

No 18328, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A common argument against divestment is that it discards voting power and has a small effect on stock prices. We argue that divestment is a statement of disapproval that aligns actions with words for effectiveness. We show that the Go Fossil Free divestment movement is a narrative with impact. Viral divestment pledges depressed the share prices of all high carbon emitters, including those with no divestment. Peak virality coincided with a concurrent rise in the carbon premium and preceded net-zero commitments. The introduction of these commitments effectively recast divestment from a moral statement to a strategic exercise in risk management.

Keywords: Divestment; Climate finance; Carbon emissions; Narratives; Twitter; Fossil fuel (search for similar items in EconPapers)
JEL-codes: D23 G32 G34 K22 (search for similar items in EconPapers)
Date: 2023-07
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