“Investors who espouse environmental, social and governance (ESG) principles will achieve little by selling their shares in ESG-unfriendly companies, according to a new research paper titled ‘The Impact of Impact Investing‘ by finance professorsJonathan B. Berkat Stanford University andJules H. van Binsbergenat Wharton.

Instead, investors could have more success if they buy those so-called ‘dirty’ stocks and then engage with those companies’ managements to adopt ESG-friendly policies, the paper contended.”

[COMMENTARY]This theme of engagement rather than divestment for poorly performing companies concerning fossil fuels and ESG performance, has become commonplace among academics and some ethical investors too. Yet, student groups continue to press for divestment in university endowments.
Why Investor Engagement with ‘Dirty’ Companies Is Better Than Divestment, by Knowledge@Wharton, November 8, 2021, USA.