Can the fund/person/company demand that the fossil fuel company gives them their money back? Basically, how can divestment ultimately work if we’re trying to get *everyone* to divest…?
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So long as fossil fuels continue to generate profits, there will be someone willing to buy the stock.
The decision to divest from fossil fuels is mostly about principals. A person or institution who owns stock in a fossil fuel company stands to gain from doing so, either through direct dividend payouts that split the profits of the company among its shareholders, or indirectly through growth in the price of the stock as they hold it. If you view fossil fuels as an inherently evil thing, you might feel dirty taking money from a company that deals in them, and that’s fine. Investing doesn’t just have to be about profits.
But for a great many dollars in the market, investing *is* just about profits. This isn’t just individual hedge fund guys. Pension funds, mutual funds, sovereign wealth funds, trusts, etc. all invest money with minimal oversight from the people who actually have a claim on that money. Many have legal obligations to invest according to certain rules or to maximize returns given some level of risk. So long as it’s a good financial investment, these entities will happily buy up divested fossil fuel stocks. The price of those stocks may dip as they’re divested, but they’ll never fall that far below whatever fundamental valuation the fossil fuel business can support.
It’s tempting to entertain a hypothetical of “what if there was a company widely acknowledged to be profitable, but no one would buy its stock at any price?” but it’s so far outside the reality of investing, it’s hard to even know how to begin talking about it. There are frequently stocks that nobody wants to buy, but that’s because of some new information that makes them worthless (like the company was a scam). It would be like having a perfectly good $20 bill that the store won’t take “just ’cause”.
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