Divestment Movements over Environmental Issues: The Brazilian Amazon Case

Devastating forest fires in Brazil’s Amazon rainforest, one of the most important biomes for Earth’s climate balance, have captured the world’s attention in 2019 and 2020. Foreign governments, non-governmental organizations, and institutional investors pressured Brazilian President Jair Bolsonaro to act and control the situation. Within this context, institutional investors threatened to divest from companies potentially linked to the wildfires and to sell government bonds, creating a divestment movement. Against this background, this article shows that Bolsonaro’s responses varied for each of the groups criticizing the handling of the environmental situation. It is argued that the Brazilian government adopted a more conciliatory tone and took more concrete actions when responding to institutional investors’ demands, compared to the responses for foreign governments and non-governmental organizations (NGOs). Based on fifteen in-depth interviews conducted in 2021 with professionals involved in this divestment case, the paper concludes that institutional investors played a key role in Bolsonaro’s winning coalition and electoral aspirations. Moreover, the shortage of financial capital due to the COVID-19 pandemic created further incentives for Bolsonaro to avoid conflicts with institutional investors. KEYWORDS: Divestment; Amazon Rainforest; Wildfires; Investors; Climate Change; Brazil; Politics