Divestment dominos fall

Welcome to the Strawman, the daily climate newsletter that’s like that buddy that spent 328 hours doing this week’s homework so you could copy it in 5 minutes. Gotta love that guy.

Today, we're diving into Divestment with a capital D. It's a movement that's been gaining speed like a Tesla Roadster on a sugar rush, but it's also got its fair share of haters. A bunch of professors in Stockholm wrote a 49 page paper about the impact of divestment movements on the market - because The Strawman loves you, we went ahead and read the paper to give you the highlights.

What is divestment?

Picture this: You're at a party, and that one friend who always talks about their "investments" starts bragging about how they're making bank. But then, they hit you with a plot twist—they're divesting. That's right, they're selling off stocks like they're going out of style.

Like when that girl you like doesn’t respond after your first date, divestment sends a strong message - investors no longer support what that group of people is doing.

Keyboard warriors

Now I hate keyboard warriors as much as the next person - but turns out they actually make a difference. The study found that when divestment tweets go viral, they have an outsized impact on carbon-intensive companies.

When I say outsized, I mean they're wiping billions off these companies' market values like it's a game of Whack-A-Mole. The researchers discovered that after a viral divestment tweet, the market value of big carbon emitters fell waaay more than the value of the actual holdings being sold.

Take Ireland, for example. Back in 2018, the country's parliament voted to divest from fossil fuel companies, and the news spread like wildfire on social media. In just three days, $14 billion, or 3.1%, was wiped off the collective market value of the biggest US oil, gas, and coal companies. And guess what? The Irish Strategic Investment Fund, the sovereign wealth fund, only had positions in 38 fossil fuel companies with a portfolio value of €72 million. Talk about making a statement.

The power of narrative

It turns out the pen (or, you know, the keyboard) might actually be mightier than the sword. The divestment movement has done an incredible job of crafting a narrative that has captured the world's attention.

Let's face it: climate change can be a pretty dry subject (no pun intended). But the divestment movement has managed to make it relatable, engaging, and even a little bit sexy. They've turned it into a David vs. Goliath story, with everyday folks taking on the big, bad fossil fuel industry—and winning.

And it's working. More than 1,550 institutions and other groups with $40 trillion in assets have pledged to divest from at least some fossil fuels. Turns out that a compelling narrative can move mountains—or at least, shift a whole lot of money out of fossil fuels.

Till next time,

The Strawman