Divestment is the opposite of investment; it means selling or reducing assets in a given entity in order to exert negative pressure on that entity, thus using the marketplace to promote certain behavior or improve certain policies. It’s most often done for ethical, political, social, or environmental reasons. Divestment has been effective as a tool because it stigmatizes the targeted industry, shifts capital away from the industry in question, and activates broad-based constituencies to take action on certain issues.
Anti-Apartheid campaigns in the ’60s, ’70s, and ’80s notably used divestment, pressuring universities and other large entities to cease investing in companies that traded with or had operations in South Africa. Over the last decade, divestment has been gathering momentum as a tool to fight climate change, with thousands of individuals, companies, universities, and foundations banding together to divest assets from fossil fuel companies.
THE DIVEST-INVEST MOVEMENT
Divest-Invest, a divestment movement that began in 2011 with a handful of US-based students and non-governmental organizations demanding that university endowments divest from fossil fuel companies, now has global reach. Oxford University named it the fastest-growing divestment campaign in history, representing more than $3.4 trillion in assets under management among more than 50,000 individuals and institutions committed to divesting from fossil fuel companies and instead investing in clean energy, agriculture, or sustainable and local businesses.