More than 200 authors including Naomi Klein, Sally Rooney and George Monbiot have signed a statement by Fossil Free Books (FFB), which puts increased pressure on investment management firm Baillie Gifford, sponsors of the Baillie Gifford prize for nonfiction. In addition to the reiteration of its previous demands that the company ceases its investments in the fossil fuel industry, the group is asking that Baillie Gifford also divests “from companies that profit from Israeli apartheid, occupation and genocide”, as it believes that “solidarity with Palestine and climate justice are inextricably linked”.

Literary organisations that accept sponsorship from Baillie Gifford “can expect escalation, including the expansion of boycotts, increased author withdrawal of labour, and increased disruption until Baillie Gifford divests,” the statement reads.

“Until the firm agrees to divest, we call on all literary organisations, including festivals, to end their relationships with Baillie Gifford.”

Baillie Gifford sponsors a number of literary festivals, including the Hay festival, Cheltenham literature festival and Edinburgh international book festival, as well as the UK’s most prestigious nonfiction award, the Baillie Gifford prize. In August 2023, climate activist Greta Thunberg pulled out of her scheduled appearance at the Edinburgh international festival, accusing Baillie Gifford of “greenwashing”.

Naomi Klein, author and professor of climate justice, said: “Literary festivals rely on the labour of writers, editors and translators. We donate our labour because we love to gather and meet our readers, but we have the right to demand that these gatherings divest from the forces causing death and destruction on an unfathomable scale.”

After Thunberg’s withdrawal from Edinburgh, a group of writers and book industry workers formed FFB. An open letter was signed by more than 50 authors and event chairs including Zadie Smith, Ali Smith and Katherine Rundell, calling on Baillie Gifford to stop investing in fossil fuel-linked businesses. If that demand wasn’t met, the letter said Edinburgh should find a new sponsor – and if it didn’t, authors should boycott the 2024 festival.

Since then, FFB has continued to put pressure on Baillie Gifford. During an extraordinary general meeting of the UK’s largest trade union for writers, illustrators and translators, the Society of Authors (SoA), earlier this month, members voted in favour of FFB’s motion calling for the book industry to break ties with the investment firm. However, a second motion put forward by FFB, calling for the SoA to issue a statement saying it supported an immediate ceasefire in Gaza, was narrowly defeated.

A spokesperson from Baillie Gifford has reiterated that just 2% of its clients’ money is invested in “companies with some business related to fossil fuels”, compared to the market average of 11%. The spokesperson also said that divesting in the way FFB asks is not actually possible, because of regulations all UK asset managers must follow. “We are managers of other people’s money, not our own”, they said. “When it comes to subjective ethical situations relating to particular sectors (such as fossil fuels) or countries (such as Israel), our clients set the parameters and determine what to exclude or divest. We are not in a position to make exclusions of that nature based on our own ethical judgments, or in response to pressure from outside groups.”

Baillie Gifford also believes FFB’s assertion that the company has “nearly £10bn invested in companies with direct or indirect links to Israel’s defence, tech and cybersecurity industries” to be “seriously misleading”.

The figure is “based on conflating two different types of exposure”, the Baillie Gifford spokesperson said. While the company’s clients have approximately $19bn invested in the multinational technology companies Amazon, Nvidia and Meta, which have commercial dealings with the state of Israel, these dealings are “tiny in the context of their overall business,” the spokesperson said, adding that “practically every consumer and investor in the developed world is using the services of these companies.”

Baillie Gifford’s clients invest a smaller amount, approximately £300m, in three companies that have been identified as having problematic operations in the occupied territories. “We have been working with those companies to resolve their specific situations. This work has been going on since the conflict broke out and in all three cases progress has been made,” the spokesperson said.

The war in Gaza is “a deeply distressing conflict”, they added. Baillie Gifford has “huge sympathy for individuals, families and communities on all sides”.

Despite FFB’s campaigning, Edinburgh international book festival will go ahead this August with Baillie Gifford as a major sponsor. The 2024 festival will be a “space for welcome disagreement” festival director Jenny Niven told the Guardian last month.

“Many of the undersigned book workers have already withdrawn from participation in Baillie Gifford-funded festivals in 2024, including Hay festival and Edinburgh international book festival, keeping the commitment we made in our author statement last year,” FFB’s statement said. “Others commit to continue to raise our demands.”

If FFB’s renewed demands are not met, the group has committed to continue “to take action through disruption and by withdrawing our labour”.