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Home > Divestment

1 Divestment for financial goals

Often the term is used as a corporate strategy, in which a company sells off a business unit in order to focus their resources on a market it judges to be more profitable, or promising. Sometimes, such an action can be a spin-off.

2 Divestment for social goals

The term also refers to the reduction of investment in firms, industries or countries for reasons of political or social policy.

Examples of divestment for social reasons have included:

• the withdrawal of American firms from South Africa during the 1980s due to Apartheid
• discussion over whether it is ethical to invest in companies that sell tobacco

Discussion of divestment for social, environmental and political reasons has arisen frequently on college campuses. For example, taking into account faculty and student opinion, several university boards of trustees voted to divest from South Africa entirely during the 1980s, in some cases after widespread protests occurred.

Such divestment activities have brought the notion of "socially conscious investing" into the public eye. Under such a philosophy, investors intentionally invest in companies whose policies they believe to be especially aligned with their own interests, such as in environmental protection.

By divesting from certain sectors of the economy, and investing in others, such investors may intend to provide a marketA market is a mechanism which allows people to trade, normally governed by the theory of supply and demand. Both general and specialised markets, where only one commodity is traded, exist. Markets work by placing many interested sellers in one place, thus-based incentiveIn economics, an incentive in anything that provides a motive for a particular course of action — that counts as a reason for preferring one choice to the alternatives. Since human beings are purposeful creatures, the study of incentive structures is cent for corporate social responsibilityDefinition Corporate Social Responsibility (CSR) is a term describing a company’s obligation to be accountable to all of its stakeholders in all its operations and activities with the aim of achieving sustainable development not only in the economical dim.

See also:

• Financial economicsFinancial economics is the branch of economics concerned with the workings of financial markets, such as the stock market, and the financing of companies. It can be distinguished from other branches of economics by its "concentration on monetary activitie, Mergers and acquisitionsThe phrase mergers and acquisitions (M&A refers to the aspect of business strategy and management dealing with the merging and/or acquiring of different companies. Usually these occur in a friendly setting where officers in each company involved come toge, Corporate social responsibilityDefinition Corporate Social Responsibility (CSR) is a term describing a company’s obligation to be accountable to all of its stakeholders in all its operations and activities with the aim of achieving sustainable development not only in the economical dim

Politics	Business	Finance

Topics: Divestment Social Corporate Goals Financial Reasons Term Invest...

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DivestmentDivestment is a term in finance and economics. It refers to the reduction of some kind of asset, for either financial or social goals. A divestment is the opposite of an investment. Divestment for financial goals Often the term is used as a corporate stra