Divestment Works.


Panel of speakers, including Lou Allstadt (second from left) at the DivestInvest press conference on December 12. CREDIT: Fenton.

Panel of speakers, including Lou Allstadt (second from left) at the DivestInvest press conference on December 12. CREDIT: Fenton.

Some friends of mine, who I met at the Oceti Sakowin camp, recently asked about particular points in getting similar movements going, in regard to the fossil fuel problem. One thing I mentioned was divestment, because economic sanctions work. This is also activism which is fairly easy for most people to do. It doesn’t take much effort, but it packs a huge wallop, and it’s a wallop which actually gets the attention of those with mass amounts of money and power. A short while back, Ruth Hopkins tweeted a letter that Wells Fargo wrote to Standing Rock, requesting a meeting, because the divestment caused them many woes.

Divestment activism is spreading, and everyone can help by boosting the signal about this specific type of activism. Everyone can choose where they want their money to be, and what they want their money to aid and fund. Think Progress has some articles up about divestment, highly recommended reading. Divestment campaigns are growing, and they work!

The global divestment movement has topped $5 trillion.

Seattle might break ties with Wells Fargo over bank’s Standing Rock investments.

There are often updates about divestment campaigns on #NoDAPL, and Ruth Hopkins stays on top of everything.

Comments

  1. brucegee1962 says

    Ok, I found the linked article rather confusing, in that it seemed to conflate two different movements. There is a movement to boycott Wells Fargo — cut up credit cards, close down accounts, etc. That’s fine — boycotts do indeed have a pretty good track record, when they target specific sections of a competitive industry from a moral standpoint. Those companies really do want to keep your business from going to their competitors. If changing a policy keeps customers happy, they can often be persuaded. Of course, our foes have figured this out too, which reduces the effectiveness of an issue like, say, unisex bathrooms if companies get a “boycotted if we do, boycotted if we don’t” mentality. Then it just becomes a numbers game.

    But the article and the OP also seem to be talking about divestment, which as I understand it is a movement to exert pressure on organizations that hold stock (universities, townships, retirement funds, etc.) to sell stocks that are seen as morally objectionable. Now, if you as an individual want to try to make sure that your retirement portfolio doesn’t include bad companies, I can think of a lot of good reasons to do so. However, the reason that “if enough people don’t want this company’s stock, they will change their ways” isn’t one of them. Stocks don’t work like that.

    Say the entire stock market consists of twenty people, and eighteen of them all decide to sell off their holdings in Exxon because Exxon is a scuzzy company. Well, the fundamentals of Exxon’s earnings haven’t changed, so for the remaining two people in the room, the value of the stocks hasn’t changed. So they will bid against each other to buy off the stocks that the others are selling, and the price of the stock will barely move. Maybe it will go down a few pennies, but Exxon doesn’t care — its executives and their buddies are probably among those doing the buying. They just say “Wheee, it’s bargain time!”

    Now, in the comments to the linked article, a bunch of people were talking about the success of the South Africa apartheid divestment campaign. That was a bit different. Divestment campaigns can have an impact if they are targeted on shaming a company to get them to do something that doesn’t significantly damage them. In that case, it was “Don’t buy the stocks of these companies as long as they have big investments in apartheid South Africa.” But the real goal of the campaign wasn’t to make those companies go bankrupt, or even to make them pull out of SA. The reason the divestment campaign influenced them is that companies and stockholders really do care about bad publicity. So the ultimate goal was to make the CEOs of those companies go to DeClerk and the other SA leaders and throw their weight around and say, “Look, we’re getting dragged through the mud with this whole apartheid business — it’s time to end it, pronto.” That’s what I mean by targeted shaming — it’s a way to get companies to do things that aren’t really contrary to their own best interests anyway.

    A divestment campaign against a bank, to persuade it to stop investing in pipelines and put its money elsewhere? That might work. A divestment campaign against Exxon, to try to get it to — what? Stop existing? Go out of business? Most of the time, these divestment proponents can’t actually even explain what they expect the companies they’re targeting to do. Exxon just laughs at them. They don’t care about bad publicity, because it doesn’t affect their bottom line — people are still buying just as much of their product.

    This is also activism which is fairly easy for most people to do. It doesn’t take much effort

    Exactly. It’s the online petition of activism. Most effective activism does take effort.

    I’ve been involved in the board of a local climate change activist organization. There are a lot of good things that can be done at a local level. Write personalized letters to elected officials. Lobby at the state and local levels for specific pieces of environmental legislation. Create and publicize organizes that promote energy efficiency. Help your local schools put up solar panels. All those things are doable, but they take effort. The biggest problem with the divestment movement, IMO, is that it saps energy away from projects that can actually do good, and gets activists chasing after a chimera.

    Your really want to put the hurt on Exxon? Stop buying oil. As long as you can’t afford that Fusion, though, there isn’t much you can do to hurt them.

  2. KG says

    brucegee1962@1,

    I think your argument against the effectiveness of divestment is simplistic.

    A divestment campaign against Exxon, to try to get it to — what? Stop existing? Go out of business?

    Shift investment into renewable energy. Fund serious development of carbon capture and storage. Stop funding right-wing thinktanks that promote lies about climate change. Stop trampling the rights of indigenous peoples.

    You say yourself:

    The reason the divestment campaign influenced them is that companies and stockholders really do care about bad publicity.

    Now, why do they care about bad publicity? As you suggest, some of that concern is because of the possibility of consumer boycotts – and where those would bite, they are likely more effective than divestment campaigns. But for a company the size of Exxon, politics matters. If you can’t see that after Trump’s apppointment of the CEO of Exxon as Secretary of State… But political clout depends heavily on who your allies are. Many of the big investors these days are pension funds, and the managers of those funds have an interest in seeing high and reliable returns on their investments. They are thus likely to oppose political measures that would affect the fundamentals of the corporations in which they are invested – in the case of Exxon, measures such as cuts in subsidies to the oil industry, carbon taxes or rationing, bans on fracking and other unconventional oil and gas recovery methods, support for energy conservation and low-carbon energy production. In short, the main point of divestment in fossil fuels is to drive a wedge between fossil fuel corporations and their political and financial support networks. It’s not as though there aren’t good reasons even for the greediest of capitalists to support urgent action to reduce greenhouse gas emissions.

    As long as you can’t afford that Fusion, though, there isn’t much you can do to hurt them.

    Well, other than stop flying, cut driving and consumption of meat and dairy, turn down your thermostat, insulate your home, buy fuel-efficient appliances, influence others to do the same, expose their lies at every opportunity, campaign politically in the ways you mentioned yourself – and pressure your pension fund to divest.

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