Call for information, examples, case studies and analysis: votes and shareholder resolutions v.s. divestment for social and environmental outcomes

by [anonymous]1 min read5th May 201634 comments


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Typology: since not elsewhere disambiguated, divestment will be considered a form of shareholder activism in this article.

The aim of this call for information is to identify under what conditions shareholder activism or divestment is more appropriate. Shareholder activism referrers to the action and activities around proposing and rallying support for a resolution at a company AGM such as reinstatement or impeachment of a director, or a specific action like renouncing a strategic direction (like investment in coal). In contrast, divestment infers to withdrawal of an investment in a company by shareholders, such as a tobacco or fossil fuel company. By identifying the important variables that determine which strategy is most appropriate, activists and shareholders will be able to choose strategies that maximise social and environmental outcomes while companies will be able to maximise shareholder value.

Very little published academic literature exists on the consequences of divestment. Very little published academic literature exists on the social and environmental consequences of shareholder activism other than the impact on the financial performance of the firm, and conventional metrics of shareholder value.

Controversy (1)

One item of non academic literature, a manifestos on a socially responsible investing blog ( weighs up the option of divestment against shareholder activism by suggesting that divestment is appropriate as a last resort, if considerable support is rallied, the firm is interested in its long term financial sustainability, and responds whereas voting on shareholder resolutions is appropriate when groups of investors are interested in having an impact. It’s unclear how these contexts are distinguished. DVDivest, a divestment activist group (’t shareholder activism have more impact than divestment?) contends in their manifesto the shareholder activism is better suited to changing one aspect of a company's operation whereas divestment is appropriate when rejected a basic business model. This answer too is inadequate as a decision model since one companies can operate multiple simultaneous business models, own several businesses, and one element of their operation may not be easily distinguished from the whole system - the business. They also identify non-responsiveness of companies to shareholder action as a plausible reason to side with divestment.

Controversy (2)

Some have claimed that resolutions that are turned down have an impact. It’s unclear how to enumerate that impact and others. The enumeration of impacts is itself controversially and of course methodologically challenging.

Research Question(s)

Population: In publicly listed companies

Exposure: is shareholder activism in the form of proxy voting, submitting shareholder resolutions and rallying support for shareholder resolution

Comparator: compared to shareholder activism in the form of divestment

Outcome: associated with outcomes  - shareholder resolutions (votes and resolutions) and/or indicators or eventuation of financial (non)sustainability (divestment) and/or media attention (both)

Potential EA application:

Activists could nudge corporations to do the rest of their activism for them. To illustrate: Telstra, Paypal UPS Disney, Coca Cola, Apple and plenty other corporations have objected to specific pieces of legislation and commanded political change in different instances, independently and in unison, in different places, as described [here]( This could be a way to leverage just a controlling share of influence in an organisation to leverage a whole organisations lobbying power and magnify impact.
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