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Investor Attention to the Fossil Fuel Divestment Movement and Stock Returns

Author

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  • Imane El Ouadghiri
  • Mathieu Gomes

    (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020])

  • Jonathan Peillex
  • Guillaume Pijourlet

Abstract

This study investigates whether investor attention to the fossil fuel divestment (FFD) movement is related to the stock returns of firms involved in extracting fossil fuels. We consider three complementary indicators of investor attention to the FFD movement: (1) the US weekly Google Search Volume Index on the topic "fossil fuel divestment," (2) the US weekly media coverage of fossil fuel divestment, and (3) the number of weekly visits to the "fossil fuel divestment" page on Wikipedia. Based on a sample of weekly returns on 1,850 US firms over the period 2012-2020, our econometric estimations report a positive relationship between investor attention to FFD and excess stock returns for US fossil fuel-related firms. Therefore, contrary to what the FFD campaigners might expect, the stigmatization of the fossil fuel industry does not drive down the stock returns on fossil fuel-related firms.

Suggested Citation

  • Imane El Ouadghiri & Mathieu Gomes & Jonathan Peillex & Guillaume Pijourlet, 2022. "Investor Attention to the Fossil Fuel Divestment Movement and Stock Returns," Post-Print hal-03549713, HAL.
    • Handle: RePEc:hal:journl:hal-03549713
    Note: View the original document on HAL open archive server: https://hal.science/hal-03549713
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    Cited by:

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    2. Delâtre, Chloë, 2022. "Désinvestissement des combustibles fossiles: quelles conséquences pour la gestion de portefeuille ? [Fossil fuel divestment and portfolios implications]," MPRA Paper 114633, University Library of Munich, Germany.

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    Keywords

    fossil fuel divestment; stock returns; investor attention; fossil fuel-related firms;
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