Skip to main content

Voice Through Divestment 


Marco Becht

Solvay Brussels School of Economics and Management, Université libre de Bruxelles, CEPR and ECGI

Anete Pajuste

Stockholm School of Economics, Riga, Harvard Law School and ECGI

Anna Toniolo

Harvard University



A common argument against divestment is that it jettisons voting power and that it has a small effect on stock prices. We argue that divestment is a form of voice that changes social preferences. We show that the Go Fossil Free divestment movement has had a disproportionate impact on share prices by changing the economic narrative. By stigmatising target companies, it has increased stranded asset risk. Divestment pledges that went viral have depressed share prices of all high carbon emitters, including those with no significant divestment. Peak virality coincides with an increase in the carbon premium and precedes netzero commitments from countries, regions, cities, and business. By altering the social and regulatory environment, divestment induces risk averse investors to decarbonise their portfolios, further reinforcing the narrative.

Scroll to Top