Voice Through Divestment

Voice Through Divestment

Marco Becht, Anete Pajuste, Anna Toniolo

Series number :

Serial Number: 

Date posted :

March 13 2023

Last revised :

March 13 2023
SSRN Share


  • Divestment • 
  • fossil free • 
  • carbon budget • 
  • shareholder engagement • 
  • responsible investment • 
  • climate change • 
  • Carbon Premium • 
  • economic narratives • 
  • net-zero commitments • 
  • social preferences • 
  • tweets as data

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 net- zero 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.


Real name:
Fellow, Research Member, Institutional Member, Board Member
Solvay Brussels School for Economics and Management, Université libre de Bruxelles
Real name:
Anna Toniolo
Harvard Law School Program on Corporate Governance