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Sustainable Finance – Divestment as a Tool to Reach the SDGs?

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  2. Economics, Finance, Business & Management
  3. Vierteljahrshefte zur Wirtschaftsforschung
  4. Vol. 90, Issue 4
  5. pp. 7–18

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Schrooten, M. Sustainable Finance – Divestment as a Tool to Reach the SDGs?. Vierteljahrshefte zur Wirtschaftsforschung, 90(4), 7-18. https://doi.org/10.3790/vjh.90.4.7
Schrooten, Mechthild "Sustainable Finance – Divestment as a Tool to Reach the SDGs?" Vierteljahrshefte zur Wirtschaftsforschung 90.4, 2021, 7-18. https://doi.org/10.3790/vjh.90.4.7
Schrooten, Mechthild (2021): Sustainable Finance – Divestment as a Tool to Reach the SDGs?, in: Vierteljahrshefte zur Wirtschaftsforschung, vol. 90, iss. 4, 7-18, [online] https://doi.org/10.3790/vjh.90.4.7
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Sustainable Finance – Divestment as a Tool to Reach the SDGs?

Schrooten, Mechthild

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 90 (2021), Iss. 4 : pp. 7–18

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/vjh.90.4.7
Language
English
Pages
12
Keywords

Author Details

Mechthild Schrooten, Hochschule Bremen

  • Mechthild Schrooten has been working as a Professor at the School of International Business, Hochschule Bremen since 2007. Before, she was a Senior Researcher and Deputy Head of Department “International Economics” at the DIW Berlin and a Professor at the Hitotsubashi University, Tokyo. Today as before, her main fields of interest are transformations, tension and extreme events in international economics. She is a founder of the research Cluster DTX (dynamics, tension and xtreme events) at Hochschule Bremen. Recently, she is publishing on banking, sustainable finance and macroeconomic stability in uncertain times. She holds a doctorate degree from the Free University Berlin.
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References

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Abstract

This paper synthesizes the literature on sustainable divestment. Nowadays, divestment seems to be a popular strategy to sanction harmful industries or socially not desired outcomes of economic activities. However, in practice for a long time many firms which were known for harmful technologies did not face divestment or a loss in value. Seminal theoretical work was done by Heinkel et al. (Heinkel, Kraus, & Zechner, 2001). Recent theoretical studies based on this approach show that divestment has huge limitations. Theory explains that “voice” (engagement in the company) is superior to “exit” (divestment).

Nevertheless, the divestment movement and campaigns are of considerable social size. The effects of divestment on the financial market seems to be small in monetary terms. However, there are a lot of side effects, such increasing social awareness concerning the wasteful lifestyle. The divestment movement is gaining importance and actors. Therefore, the divestment movement is a supporting tool to reach SDGs. Not directly via the impact on the financial market, but by raising the social awareness.

Table of Contents

Section Title Page Action Price
Mechthild Schrooten:\nSustainable Finance – Divestment as a Tool to Reach the SDGs? 7
1 Introduction 8
2 Background – Stylized Facts 9
3 Theory: What Does the Literature Tell? 10
4 Empirical Considerations 12
4.1 Divestment: Actors 13
4.2 How to Measure the Impact of Divestment? 15
5 Conclusions 7
References 7

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