Paper short abstract:

The fossil fuel divestment movement has had strong indirect impacts on the financial world. Interviews suggest even its critics acknowledge it has changed public discourse and raised the profile of the stranded assets problem, inspired shareholder activism, and strengthened the climate movement.

Paper long abstract:

The Divestment movement calls for removing investments from fossil fuel companies. Divestment is an international network of local groups and activists, often student organisations. We consider the impact of this movement through literature review and interviews with activists, financial and institutional actors.

The direct impacts of divested funds have been too small to seriously impact the fossil fuel industry. However, Divestment's indirect effects are more profound, changing discourse around climate change mitigation. Divestment has reduced the moral and political legitimacy of the industry, and successfully questioned its longer-term stability, putting fossil fuel companies on the defensive with the 'stranded assets' discourse.

Interviewees said Divestment offered action, something people could do about climate change beyond changing individual behaviour, both for student activists, swelling the climate movement's numbers, but also for mainstream, concerned investors. Student activists were seen as naive by institutional and financial actors. Activist interviews suggest a mix, with some believing the simplistic logic of direct impact from divestment, and others seeing it as a tool for reframing discourse.

Divestment has raised the question of how to engage with decision making on energy investments. Many of its critics argue against the movement's blunt tactics, yet still acknowledge its influence on public discourse. The financial world is changing, with concepts like 'fiduciary duty' evolving to consider longer-term interests. While the Divestment movement certainly cannot take full credit for such changes, it has undoubtedly inspired shareholder activism and played a part in this cultural shift.