Climate advocates’ push for blanket disinvestments from the coal industry may lead some operations to stay in business for longer after being taken over by new owners.

“Selling the problem to a third party has unintended consequences,” said Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management. “We need to shift the debate in the investment industry about being more sophisticated around these things,” she told Bloomberg Green.

In response to pressure to shut down coal mines, the CEO of mining company Anglo American Plc abandoned plans to shift investments to the company’s smaller operations in South Africa, which would have closed down entirely in the next decade. After investors pushed for a more urgent timeline, Anglo American complied by handing the mines to a spin-off company, Thungela Resources Ltd., to be led by a trusted executive from Anglo. This allowed Anglo to get out of coal without cutting jobs and gave investors freedom to hold or sell their shares, writes Bloomberg.

But in an abrupt about-face, Thungela’s new CEO quickly laid out ambitions to expand the mines instead of phasing them out.

“I didn’t take up this role to close these mines, to close this business,”  July Ndlovu told Bloomberg. Ndlovu’s decision has been temporarily reinforced by the surging demand for electricity as the global economy recovers from COVID-19, which has boosted Thungela’s profits.

Anglo’s experience is being shared by several other companies that have lost control over coal phaseout strategies when their aggressive divestments let other owners take over. Other sectors have seen the same trend, and “some observers of the oil industry say campaigns by activists to have oil majors divest from fossil fuels could end up accelerating a shift to government owners who operate with less transparency and, occasionally, worse environmental records,” reports Bloomberg.

In response, investors are adopting different approaches to rein in coal.

“Divestment is convenient and easy to communicate,” Hamilton Claxton told Bloomberg. “Helping companies manage decline is difficult to do from an investment perspective, and showing our customers that we’ve been effective is difficult to do.”

One new approach is for a company to buy up mines to run for cash until reserves dry up, then shut them down rather than expanding. Climate advocates are also adapting, are using surprising tactics to reach their goal of ending coal without causing a backlash. In one instance, investor group Climate Action worked with mining giant Glencore to lay plans for a buyout of a Colombian mine from Anglo and BHP.

“The group saw the transaction as a way of preventing any mine extensions or the asset being passed to a less responsible owner,” writes Bloomberg. Climate Action’s strategy worked, and after the sale went through “Glencore agreed to further tighten its emissions reduction goals as part of the deal.”