Divestment campaigns have been a popular form of corporate activism.  With divestment pensions, institutions, endowments and funds withdraw investments from companies to encourage and promote certain social/political behaviors and policies. 

Erik Hendey in his article Does Divestment Work (in the Harvard Political Review) recounted recent divestment campaigns including: 

"sweatshop labor, use of landmines, and tobacco advertising. But undoubtedly the best known example of divestment occurred in the 1970s and ’80s in response to the apartheid regime of South Africa. Retirement funds, mutual funds, and investment institutions across the country sold off the stocks of companies that did business in South Africa."

A current divestment campaign is focused on guns.  In the wake of the San Bernardino, California mass shooting, this issue is poised to gain momentum.  The widespread investment in gun manufacturers will also make this campaign relevant to many investors. Andrew Ross Sorkin at the NYT DealBook writes in Guns in Your 401(k)? The Push to Divest Grows:

"If you own any of the broad index funds or even a target-date retirement fund, you’ve got a stake in the gun industry. Investments in gun makers, at least over the past five years, have performed well. Shares of Smith & Wesson are up nearly 400 percent since 2010. On Monday, shares of Smith & Wesson reached their highest price since 2007 after President Obama called for more gun control laws, leading investors to anticipate a rush of gun sales ahead of any restrictions."

If you are curious/concerned, Unload Your 401(k) is a website where you can check and see if you are personally invested, through your retirement savings plan, in one of the three major gun manufacturers.

Individuals may allocate their personal 401(k) money to socially responsible investment funds or in traditional funds that do not include gun manufacturers.  A traditional fund is a hard bet because even if the fund doesn't currently invest in a gun manufacturer at the time of the individual's investment, it could become a part of the portfolio. Only funds with investment parameters that specifically exclude gun manufacturers can provide such a guarantee.  

But what about endowments and pension funds– large institutional investors who are often the target of divestment campaigns because when they  choose to divest (or simply not to invest in the first place) this is where the real pressure can be applied to companies.  Many stewards of such funds manage them according to certain social principles, especially if those principles are advocated by the beneficiaries of the funds (as is the case with student activists behind the fossil fuel divestment campaigns).  Applying social pressure through such funds and on behalf of beneficiaries raises question of whether such actions are in appropriate fidelity to the trust position over the money (not the morals) the trustees are appointed to preserve.   Bradford Cornell, at California Institute of Technology published a 2015 paper estimating the cost of fossil fuel divestment of major educational endowments, which for Harvard he figured to be over $100 million. 

-Anne Tucker