Discussing divestment: Developing an approach when pursuing sustainability outcomes in listed equities

For listed equity investors, the decision to engage with or divest from ESG laggards depends on the ESG issues concerned as well as the (sustainability) objectives of their clients and beneficiaries.

The two are not mutually exclusive – many investors favour a stewardship-first approach that includes divestment as the final step in an escalation strategy. Yet divestment may be more effective in some contexts than others.