Becht, Pajuste, and Toniolo (2023)
Becht, Marco, Anete Pajuste, and Anna Toniolo. “Voice Through Divestment.” ECGI Working Paper 900/2023.
From the authors’ 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.’
LK comment: Moskowitz Prize Honorable Mention, 2023.
Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4386469