To Divest or to Engage? A Case Study of Climate-Change Activism

16 Pages Posted: 15 Oct 2019

See all articles by David Chambers

David Chambers

University of Cambridge - Judge Business School; CEPR

Elroy Dimson

University of Cambridge - Judge Business School; London Business School

Ellen Quigley

University of Cambridge

Date Written: September 22, 2019

Abstract

A dilemma faced by an increasing number of investors is whether to boycott environmentally damaging businesses or whether to enter into a dialogue with them. This predicament now has its epicentre in Cambridge, England, where the ancient university faces great pressure from students and staff to respond to the threat of climate change. Having already received two reports on its approach to responsible investment, the university has appointed a new chief investment officer (CIO) who needs to consider the question of whether to divest or to engage. What would be the financial effects of each choice, and what would be the outcome in terms of environmental impact? Our case describes the background and the research behind the debate. The new CIO and her recently-appointed colleague, the chief financial officer, will present their ideas to the university. In contrast with other Journal articles, we do not propose solutions. Instead, we ask you, the reader, to consider the arguments and to take a position.

Keywords: Climate change, responsible investing, fossil fuel, ESG, activism, endowments, portfolio management

JEL Classification: G11, M14, Q54

Suggested Citation

Chambers, David and Dimson, Elroy and Quigley, Ellen, To Divest or to Engage? A Case Study of Climate-Change Activism (September 22, 2019). Available at SSRN: https://ssrn.com/abstract=3464027 or http://dx.doi.org/10.2139/ssrn.3464027

David Chambers

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
44 (0)1223 339700 (Phone)

CEPR ( email )

London
United Kingdom

Elroy Dimson (Contact Author)

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 700 607 7390 (Fax)

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
44 20 7000 7000 (Phone)
44 700 607 7390 (Fax)

Ellen Quigley

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

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