A case for divestment: buy this not that here not there

[Chan]

For those that are concerned with our current direction, but see no clear way to enact real change.  Here are some thoughts from the Stromes:
The Power of Divestment: How Individuals Can Influence Government Action and Policy
In an era where corporate influence often intersects with government decision-making, individuals are seeking effective ways to advocate for change. One such method is divestment—withdrawal of investments from companies that operate against the best interests of society. This approach not only aligns personal finances with ethical values but also serves as a powerful tool to influence corporate behavior and, by extension, government policy.Historical Precedent: The Impact of Divestment
Divestment has historically been a potent strategy for driving social and political change. During the apartheid era in South Africa, international divestment campaigns pressured governments and corporations to withdraw support from the regime, ultimately contributing to its dismantling. Similarly, recent fossil fuel divestment movements have prompted institutions worldwide to reconsider their investments, influencing public opinion and policy debates on climate change.
Mechanisms of Influence
Financial Pressure:
While individual divestment may seem insignificant, collective action can impact a company's financial standing. A noticeable withdrawal of investments can signal to corporations that their practices are unacceptable, prompting internal reviews and potential policy changes.
Shift in Corporate Behavior:
Companies reliant on public image and consumer trust may alter their practices to avoid further divestment and reputational damage. This shift can lead to corporate lobbying for more favorable government policies or voluntary adoption of ethical standards.
Public Awareness and Advocacy:
Divestment campaigns often garner media attention, raising public consciousness about critical issues. Increased awareness can galvanize grassroots movements, pushing governments to respond with new regulations or policies.
Corporate CEOs and Government Influence:
In the current environment, the relationship between corporate leadership and government policy has become increasingly intertwined. Many CEOs now hold direct influence over government decisions, whether through lobbying efforts, advisory roles, or even holding public office. This dynamic underscores how divestment can have a more direct impact on government action than ever before. When individuals choose to divest from companies whose CEOs are actively involved in shaping policies that harm the public interest, they are not only targeting the company's bottom line but also undermining the influence of these corporate leaders in the political arena. By withdrawing financial support from such corporations, individuals can send a powerful message to both companies and policymakers that unethical practices will not be tolerated.
The Role of Individual Action
Individuals play a crucial role in this process by making conscious investment choices. By divesting from companies engaged in harmful practices, individuals not only express their values but also contribute to a broader movement. This collective action can amplify the message, encouraging others to follow suit and creating a significant impact.
Balancing Divestment with Engagement
Critics argue that divesting from companies may reduce the influence ethical investors could wield internally. However, proponents counter that symbolic and collective divestment can still effect change by altering societal norms. The power lies not only in financial impact but also in the cultural shift towards accountability and sustainability.
Conclusion: A Path to Policy Change
While divestment alone may not directly dictate government action, it is a formidable component of a broader strategy. By influencing corporate behavior and mobilizing public opinion, divestment campaigns can pressure governments to adopt policies that reflect the ethical demands of their constituents. As individuals, choosing to divest is an active step towards aligning personal values with global change, illustrating the profound impact of informed and committed citizenry. In an era where corporate leaders are increasingly involved in shaping government policy, the act of divestment becomes even more directly tied to influencing political outcomes. By targeting companies with undue political influence, individuals can help restore balance to a system where corporate interests often outweigh public needs. The power of divestment lies in its ability to challenge not just corporate practices, but the very mechanisms through which corporations shape government action.

[eastbound]

I agree, Chan, and feel that voting with one's pocketbook is important.
This regards one's consumer and capital goods purchases, as well as one's financial investments.
Seems easier to take care with goods purchases, where attention can be paid to who produces and who sells the goods.
On the investment side, it is more difficult. Index investing dominates these days, and for most people with investment portfolios (fewer than half of Americans) is more prudent that stock picking. Hell, most professional stock pickers underperform the indexes they seek to beat.
With index investing, it's difficult to have any control over which specific (possibly dirty) companies one supports. There are "ESG" index funds (ESGV), that do very well to track mainstream indexes (SPY), but exclude dirty companies, and I now invest in them instead of the mainstream variants. But the standard for ESG funds is highly flexible, and these funds often include companies I dont want to support. OTOH, it's a start, and there are many awful companies the ESG funds avoid.
The other factor relates to cap gains tax exposure. I hold lots of SPY that I'd happily swap to ESGV, for ex, but the cap gains tax bite would severely limit ongoing compounding of that money. This situation exists maximally throughout our investment world. There is a ton of money in index funds that incl dirty companies, and a ton of money in dirty companies, where a move out of those exposures will put serious tax bite on the investors. Tough to expect investors to take that tax hit to effect a moral/political statement (and, hopefully, effect).
Lastly, there is a well-funded attack on ESG investing by, surprise, those with stake in dirty businesses and companies.
Again, tho, gotta start somewhere, and I make efforts that arent too economically painful.