AK Divestment Legislation Uses Targeted Divestment Model. What is that?

Targeted divestment calls for the expedited engagement of companies that are directly or indirectly helping the Sudanese government perpetuate genocide. Only if a company refuses to change its behavior in response to shareholder engagement does the targeted divestment model call for divestment from that company. Since the ultimate intent of Sudan divestment is to protect the victims of genocide, it is important to tailor divestment to have maximal impact on the government of Sudan's behavior and minimal harm to innocent Sudanese (and to the financial health of institutional portfolios). Divestment should therefore be targeted to those companies that have a business relationship with the government or a government-created project, impart minimal benefit to the country's underprivileged, and have expressed no significant corporate governance policy regarding the Darfur genocide (so-called targeted divestment). Such targeted divestment implicitly excludes companies involved in agriculture, the production and distribution of consumer goods, or the provision of goods and services intended to relieve human suffering or to promote health, religious and spiritual activities, or education.

When an institution divests from these types of companies (so-called "worst offenders") demand for offending companies' stocks falls and share prices decline. Share price is further reduced by the presence of additional Sudan divestment campaigns, many of which are already in progress. To protect the value of shareholder investments, offending company executives would convey to the Sudanese government that perpetuation of genocide in Darfur is making the country an undesirable place to do business. As a result, either government behavior would change (in order to keep businesses in Sudan) or offending companies would leave Sudan, thereby withdrawing money that had been used to purchase military equipment for the genocide. Withdrawal of business investments from Sudan would simultaneously create an economic penalty for genocide and reduce Khartoum's ability to fund the campaign.