The capital market impact of Blackrock’s thermal coal divestment announcement

This study examines how coal companies were affected by the announcement of thermal coal divestment made by Blackrock, a large institutional asset manager. Following the announcement, the largest thermal coal mining companies exhibited negative abnormal returns. However, the stock prices of other firms were not affected. Blackrock’s own share price increased following the announcement. We provide additional evidence that Blackrock protected its clients by lowering its exposure towards affected companies before the announcement. Overall, our results show that divestment has significant impacts on the companies in question and that the capital market sees divestment as value-enhancing for the divesting institution.