The most important dilemma that ESG investors are faced with is the question of whether to boycott environmentally harmful companies or to enter into dialogue with them – in other words, whether to simply divest or to engage with them.

State Street Global Advisors (SSGA), the world’s third largest asset manager, said that they expect this to be a hotly debated issue in 2021. As environmental damage triggered or exacerbated by climate change increases around the globe, public pressure on companies to mitigate environmental damage and to promote social sustainability through their activities is growing. For (ESG) investors, this inevitably leads to the question of how to deal with investments in shares of companies that harm the environment or society.

A recent report published in the Financial Times states that divestment, which was historically understood as a pressure tactic reserved for students and religious investors, has become an issue that the world’s biggest asset managers can no longer ignore.

Big names have brought divestment to the centre stage. For example BlackRock, the world’s largest asset manager, announced a year ago that it would eliminate any companies that generate a quarter of their revenues from thermal coal production from its active investment portfolios. Others have made similar announcements.

But divestment has its downsides. Investors stand to lose their voice as a stakeholder and the stock may be bought by less ESG focused investors. So whether to divest or engage – or execute a combined strategy – is a key question for ESG investors at the moment.

Join us for the Virtual Thematic Event to address this dilemma, hear expert inputs on the topic from our speakers Ellen Quigley, Matthias Narr, Taeun Kwon, Julian Kölbel and Emma Farrell and afterwards dive into discussions with peers.

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