The PR risk from disinvestment

Yesterday we praised Yorkshire Tea for a swift response to the trouble at Yorkshire Country Cricket Club. As sponsors, they are out, and right quick.

We also suggested that sometimes staying involved with organisations in need of reform might be the bigger thing to do.

Today’s FT addresses just that in a piece about the $110 trillion investment industry and its moves to get tougher on climate change.

Should it stay or sell?

I think it should mostly stay. The best chance of BP and Shell doing what we require of them is if the shares are held by a bunch of big institutions like Aviva with their own reputations to protect.

The piece reports: “Aviva warned about 30 fossil fuel intensive companies that if they failed to take radical action to slash their emissions, it would sell out across its equities and fixed income portfolios within one to three years.”

That’s a clear threat, but doesn’t the tricksy CEO spy an opportunity here?

If he just carried on making money in the same old ways, he can get these troublemakers off his shareholder register within three years, and hope they are replaced by a bunch of less scrupulous investors who could care less about the environment.

Once it sells, Aviva is powerless to do anything useful here.

At the moment, big companies are winning praise for getting out of “dirty” investments.

It really isn’t all that straight forward an issue and there must be a risk that our pension funds get into trouble for reckless selling of assets we would rather were held by them than a villain straight out of James Bond.