The writing is on the wall because of climate change worries, but even without that there are the pollution consequences. So the argument goes that the more people who divest, the quicker fossil fuels becomes unattractive to others. That’s the argument. The problem with the argument is that for every stockholder that divests there must be a stockholder that invests – there must be a buyer for every seller. The buyers are likely be those who have listened to the environmental concerns and don’t care. Being who they are, they are more likely not to care what the oil companies do.
So the worst traits and behaviour are given more free rein, leading to more shortcuts, more Gulf Of Mexico oil spills. The price will find its own level and not fall through the floor, so the fossil fuel companies won’t suffer. Perhaps the divestment movement sees other effects – such as that Governments will be carried along by the wave of concern and legislate to keep fossil fuels in the ground.
But excepting knock-on effects like this, I can’t see a flaw in the argument that the unintended consequences of fossil fuel divestment is to concentrate ownership in the hands of those who don’t care.