They do some half-hearted “analysis” of the South Africa and Israel disinvestment campaigns, but really all they do is point at a couple of graphs and say “its hard to see anything here”; by the Economist’s standards, that’s rubbish. Some may like:
On the other hand, there is little evidence that ethical investing—or its close cousins, sustainable investment, environmental, social and governance (ESG) policies and corporate social responsibility (CSR)—diminish returns. A survey published in 2009 of academic papers that focused on CSR, including environmental measures, found a mildly positive correlation between the pursuit of socially responsible policies and financial performance. A more recent study by MSCI, an index firm, covered the period from February 2007 to March 2015; it found that investment portfolios with greater exposure to firms with high ESG ratings, or to firms that had recently increased their rating, performed better than the market as a whole.
And then we’re back on the idea of “stranded assets”:
Mercer contends, it will not be possible for energy companies to exploit all their known reserves: some will become “stranded assets”. The average annual returns from coal could fall by anywhere between 18% and 74% over the next 35 years…
As to whether disinvestment might work:
A second question is whether divestment will make any difference to firms’ behaviour. It is impossible to sell an energy company’s shares without a buyer, and the buyer will presumably care less about climate change. For the energy company, life may even get easier… 350.org’s divestment campaign in Britain, says raising the cost of capital isn’t really the point. The real aim is to deny energy companies the political, social and cultural backing to influence decisions on climate change… Energy producers have seen their share prices slide over the past year—but that is down to a lower oil price, rather than an environmental epiphany among investors. Ironically, the price slide has been driven by the emergence of fracking as a new source of oil: something green campaigners are dead against. But tougher regulations to stem climate change are also emerging. The battle for hearts and wallets, like the planet, is heating up.
I don’t have any deep thoughts on this, but I’m interested, which is why this post is mostly quotes.