The notion that selling CALPERS shares will negatively affect oil companies' operations is both naïve and incorrect. The shareholder activism approach appearing in public and political discourse simply misses the mark. To illustrate, let’s take CALPERS' sale of oil company stocks as an example, which truthfully does virtually nothing to stunt the growth or trajectory of these enterprises. When these stocks are sold, they are simply transferred to other investors, therefore having no real direct impact on the companies themselves. This fundamental misunderstanding represents a significant flaw in ongoing conversations about fossil fuel divestment and sustainable investing.
1. The argument that the selling of CALPERS shares negatively impacts oil company operations is naive and incorrect.
2. Shares sold are merely transferred to other investors, leading no real direct impact on the companies themselves.
3. The belief that divesting from fossil fuels and selling off shares would alter the operations of oil companies lacks understanding of market operations.
4. Even if CALPERS, the largest public pension fund in the U.S., sells its shares, operations of oil companies wouldn't be affected, as the shares are just bought by other investors.
5. The lack of understanding of this market mechanism evidences an ignorance of basic economic principles underlying the public discourse on sustainable investing and fossil fuel divestment.
In 2020, CALPERS, the largest public pension in the U.S., held approximately $9.5 Billion in fossil fuel investments.
The assumption that selling off shares would somehow lead to the mitigation of oil companies' activities is a gross misunderstanding of how the market operates. Even if CALPERS, the largest public pension fund in the U.S., sells its shares, they wouldn't disappear; they are simply purchased by different investors. Indeed, this act fails to affect the operation of the oil companies in any way. They will continue their business as usual. Any belief to the contrary reveals a fundamental ignorance of basic economic principles.