Divestment

Divestment became, in the 20th century, a very effective way of voting indirectly and pressuring for social change in a way that companies and governments recognised: Change your ways, or lose more and more business. It famously played a role in the end of apartheid in South Africa, but it was used in other locales as well, and it’s continued to be a valuable system of activism and pushback. Colleges and universities, for example, are being more choosy about their funds and both withdrawing funds from oil and gas investments, and dropping mutual funds that can’t promise their investments will be free of oil and gas.

They’re responding to pressure from their students, alumni, and internal community to censure the oil and gas industry in the way it knows best: By driving stock prices down. If everyone is selling and no one, or very few people, are buying, prices drop, sometimes precipitously, and bottoming out can send a sharp message to companies that they need to change their ways and reconsider the way they do business. In the case of investments, a ripple effect can be created as primary investors like institutions pull out, followed by middlemen like mutual funds that can’t afford to lose customers over controversial investments.

On an individual level, divestment can be more complicated. Aside from the fact that many people do not actually have investments, and thus cannot directly participate in a public commentary on major corporations, divestment could theoretically take the form of refusing to support given companies and methods of doing business, but that’s not always feasible. The person who refuses to go to Target or Walmart to make a point about worker exploitation, for example, is definitely choosing to vote with her wallet, but not everyone is in a position to do so, and it’s unreasonable to have that expectation — thus, these companies can effectively afford to ignore the handful of potential customers they lose out on because of their business practices.

Even organised attempts at not buying from certain companies can be challenging, whether for a day, week, or some unspecified period of time. With companies like Nestle, which snap up brands left and right, it’s tremendously difficult to identify the growing family of products to avoid, and to keep avoiding them — thus, a person who thinks she’s supporting the Nestle boycott may find herself actually living in a house filed with Nestle products, frustratingly. With the growing conglomeration of multinational firms, this is an issue that’s becoming more and more common.

We see divestment being used for political purposes, to pressure companies into changing business practices, to push through acts of legislation and policy changes, and for a huge range of other purposes. But how do we make it something accessible to everyone, from colleges and universities with massive funds to invest and reinvest to people with very limited buying and influencing power? How do we make participation in divestment accessible across a range of communities and experiences, drawing upon our collective power as a people even if, as individuals, we are largely powerless?

The obvious immediate approach is to gather people with shared social investments in an organisation and encouraging them to pressure the organisation to change its investment policies. That could mean customers, employees, or other groups who might approach a group to ask it to reconsider where it invests funds and how it does business. As individuals, these people don’t have much clout, but as a group, they can send a sharp collective message — change, or die. This can be backed by demonstrations of the power and benefits of making that change, highlighting the fact that making better business and investment decisions will actually help, not harm, a company or organisation.

More indirectly, people can use their pull with other individuals who are more powerful. Maybe it’s not possible to lobby against an employer out of concerns about the risk of retaliations, for example — but perhaps other people in someone’s social milieu can resist their employers, or do have clout in terms of creating pressure to divest. Maybe someone is a college student who can join or organise a campaign for divestment. Maybe she’s in upper management in a company with a more active position and the ability to use it without fear of retailiation. Maybe she’s an analyst at a bank or mutual fund who can include the political and social consequneces of certain investments in her evaluations and recommend against them — her projections will be perfectly accurate and backed in industry research, and could have the effect of encouraging her employer to back away from such investments.

Divestment does not necessarily happen overnight, though it would certainly have a powerful impact if it did. That slow attrition over time, though, can send an incredibly valuable and important message to companies. They might not initially show it, hoping they can absorb the costs in light of what they see as the benefits, but over time, they’ll eventually have to give up — eventually the scales will tip, and the costs of a given business practice, policy, or way of doing things will be too high. The key is the ability to wait patiently for that event, rather than expecting it to happen all at once. It may be a whimper rather than a bang, but it’s going to happen, and everyone can play a role in it, no matter how small that role may be.

Image: Monopoly Money, Jason Devaun, Flickr