Divesting from Climate Change: The Road to Influence

Is fossil fuels divestment likely to achieve its aims? This article evaluates the rationales for divestment in terms of their capacity to give the campaign influence. It focuses on the direct effects of divestment on financial actors because divestment is a specific means of exerting influence outside of conventional political channels. In seeking to end fossil fuel industries in order to halt climate change, the campaign deploys a variety of arguments to win support and wield influence, namely, the legality of divestment and, indeed, the emerging duty to divest; investors’ moral responsibility to avoid complicity in the fossil fuel economy; investors’ moral responsibility to use their leverage against climate polluters; and the power of financial sanctions to create a business case for abandoning fossil fuels. Although in combination they may be effective, each of these asserted rationales has some limitations that may diminish the influence of the divestment movement. Moreover, the movement does not engage sufficiently with the systemic qualities of finance capitalism that must also be reckoned with in order to address broader patterns of environmental unsustainability. Although the divestment movement aspires to ultimately change government policies on climate change, it may achieve greater influence by also seeking better government regulation of the financial economy.