Does this case extend to general advice though - that people should stay invested in fossil fuel companies in order to regulate them a bit? It should follow that if we invest more in fossil fuel extraction we can regulate them more. It seems to confound reasonable expectations of what results from investment.

I think it's important to note that when you buy shares on the secondary market the company doesn't get any capital. You are just trading ownership for cash with the current owners.

There's a somewhat subtle and pervasive assumption that all owners will seek only to maximize returns (or similar) but that notion really needs to go.

Even with that assumption, it doesn't matter if you own shares in fossil fuel companies since all investors are equivalent.

> I think it's important to note that when you buy shares on the secondary market the company doesn't get any capital.

Companies are artificial abstractions. The people who invested in the company before you get money. If you consistently engage in a policy of engagement to deal with bad corporate citizens, you increase the positive financial rewards for earlier investors to use their governance influence to direct firms to bad corporate citizenship. Conversely, divestment does the opposite.

The magnitude of the effect of any one investor doing that is small, but that's the situation with all economic boycotts.

Divestment makes the shares cheaper for less responsible investors, who thank you for the value you let them have for less money.

It might be rather intangible, but I expect there must be a strong tendency for businesses to benefit overall when their shares are bought or kept rather than sold.

It's not as intangible as most people think. Executive compensation very often has bonuses and incentives tied to share price so the incentives don't even have to be business wide, they just have to be set up for the people ultimately in charge.

> There's a somewhat subtle and pervasive assumption that all owners will seek only to maximize returns (or similar) but that notion really needs to go.

I think a slight modification holds, though:

"all owners will seek only to maximize returns across all of their holdings, to themselves"

Chevron causing environmental damage costing me $100 personally outweighs the extra $50 those shortcuts added to my fraction of the company, etc.

And if you include moral/social costs on top of that, then IMO there really isn't anything that the expanded "maximize returns" statement doesn't cover.

Other than actual share rounds and shareholder meetings, the company doesn't actually see any result from investments.