Is our divesting from fossil fuel "extracting companies" only while tolerating money in fossil fuel dependent, heavy CO2 emitting and other directly climate-destroying sectors a true divestment?

At a time when the climate emergency demands urgent, accountable investment with predictable and transformative impact, isn’t our investing in stock markets — systems driven by speculation, detachment, and endless growth — the very opposite of responsible action?

Does our investing in climate-supportive companies through most investment instruments on the financial markets deliver any/true measurable impact? How does it actually help avert the climate catastrophe? 

Most investors are not aware that their investment is almost entirely in the Secondary Market and that is why their investment delivers no impact. Are you one of them? What is the Secondary Market? Find out more in our Research note. Request it by email. Contact Us

How can ESG claim to drive change when fossil dependent, heavy CO2 polluting, and exploitative global supply chain firms pass the ESG benchmarks — but climate restoration projects struggle for capital?
ESG is being outdated by approaches that focus on what is actually financed, not how well a company within harmful sector reports data.

Claiming ethical justification for holding high-profit shares in fossil fuel or otherwise harmful industries on the basis of “shareholder engagement” is often misleading. From a governance and legal standpoint, only a minimal shareholding—often a single share—is sufficient to access shareholder meetings or submit questions, making substantial investment unnecessary for engagement purposes. Furthermore, in large-cap corporations, the influence of minority shareholders is statistically and structurally negligible. Empirical evidence from shareholder resolution outcomes indicates that such voices rarely, if ever, alter strategic direction in carbon-intensive firms. As such, justifying continued investment in destructive assets under the pretense of influence is more often a reputational hedge than a meaningful lever for change.

Picture four people, each advising you to buy shares in Microsoft. The first is a dear Friend: warm-hearted, but with no head for finance. The second is a small local advisory firm. The third is an account manager at a major British investment house, such as Rathbones or Royal London. The fourth is a VIP-accounts director at one of the world’s largest asset managers, such as BlackRock or Vanguard. When it comes to the ethics and impact of your portfolio, does it truly matter which of the four you listened to? And if you move your investments from one well-known manager to another but still hold Microsoft, has anything real changed?

Investors often go to great lengths to choose the “right” manager, comparing sustainability credentials, policies, labels and certifications. Yet what decides whether money does good is not the manager’s language or reputation, but where the money actually goes and what it does once it is there. Any of us can find that out for ourselves, without weighing up which manager sounds most convincing. And once we have, the ethics of the investment determine the ethics of the manager, not the other way round.