Out of Sight, Out of Mind: Divestments and the Global Reallocation of Pollutive Assets

The paper presented in this Decarbonization Seminar/Joint Seminar ZEW and MISES documents a global reallocation of pollutive assets as a response to investor pressure: large firms facing increased investor pressure divest foreign-located pollutive assets to firms that are less in the limelight. There is no evidence of increased engagement in any other emission reduction activities. The authors estimate that 369 million metric tons (mt) of CO2e are reallocated via divestments in the post-Paris Agreement period. The results indicate that investor pressure to decarbonize reshapes the global conglomerate structure of large firms.