Scientific Beta

Top 1000 Funds: "It is often argued that an investor who is dissatisfied with a company’s ESG behaviour, and who wishes to remedy the situation, should stay on as a shareholder and engage with it. (...) In a recently published paper (ESG Engagement and Divestment: Mutually Exclusive or Mutually Reinforcing?) we contend that both divestment and engagement are actions that promote change."

Top 1000 Funds 01/09/2020

Article by Erik Christiansen, ESG and low carbon solutions specialist at Scientific Beta.

"(...) It is often argued that an investor who is dissatisfied with a company’s ESG behaviour, and who wishes to remedy the situation, should stay on as a shareholder and engage with it. The reasoning is that when an investor divests, their influence over the company ceases. Moreover, the act of divesting is often presented as a passive approach that has no bearing on the company’s management, a capitulation rather than a form of action. In a recently published paper (ESG Engagement and Divestment: Mutually Exclusive or Mutually Reinforcing?) we contend that both divestment and engagement are actions that promote change. (...)"