Discussion paper

DP18328 Voice Through Divestment

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.


Becht, M, A Pajuste and A Toniolo (2023), ‘DP18328 Voice Through Divestment‘, CEPR Discussion Paper No. 18328. CEPR Press, Paris & London. https://cepr.org/publications/dp18328