Divestment

Divestment refers to the act of selling off assets, investments, or divisions of a company. While divestment can be a tool for companies to streamline operations and focus on core competencies, it may not always be the most effective approach for driving long-term positive change on sustainability issues like climate change. Divesting from carbon-intensive assets may reduce a company's own emissions, but it does little to support the broader transition to a low-carbon economy if those assets continue operating under different ownership. Active ownership and engagement are often seen as more impactful strategies, allowing investors to use their influence to drive positive changes in investee companies. However, divestment can still play a role as an escalation tactic when engagement efforts have failed.