Until earlier this year, novelist and film-maker Omar Robert Hamilton didn’t know what Baillie Gifford was – it was just “two words that [he’d] seen on top of things for years and years”.

While aware that it sponsored some literary organisations, Hamilton didn’t know whether the investment management firm “was a drink or a bank or what” until he got involved with Fossil Free Books (FFB) in March. The campaign group has been putting pressure on Baillie Gifford to pull its investments in the fossil fuel industry since August 2023, when climate activist Greta Thunberg pulled out of her scheduled appearance at the Baillie Gifford-sponsored Edinburgh international book festival, accusing the asset manager of “greenwashing”. Since May this year, FFB has also asked that Baillie Gifford divest “from companies that profit from Israeli apartheid, occupation and genocide”, as it believes that “solidarity with Palestine and climate justice are inextricably linked”.

Once Hamilton was up to speed, he says it was “a very straightforward choice” to get involved with FFB and to boycott any Baillie Gifford-supported events.

The campaign organisers say that their intention was to pressure literary festivals to use their relationships with Baillie Gifford to encourage them to divest, but instead, festivals began to terminate their contracts with the firm. After a number of those scheduled to appear at the 2024 Hay festival, including the Labour MP Dawn Butler, the singer Charlotte Church and the comedian Nish Kumar, pulled out at the last minute in solidarity with FFB, the festival announced its decision to withdraw from the sponsorship deal. The following week, Edinburgh international book festival organisers and the asset manager “collectively agreed” to end their partnership after 20 years, and by Thursday last week Baillie Gifford had cancelled all of its remaining literary festival sponsorship deals.

FFB has no “leaders” as such – the group is a non-hierarchical collective – but I am speaking to four of its organisers: Hamilton, children’s author and illustrator Emma Reynolds, who joined the campaign group this year, and the novelists Guy Gunaratne and Jessica Gaitán Johannesson, both part of the group of writers who formed the group after Thunberg’s withdrawal from Edinburgh. In July 2023, the group published its first open letter calling on Baillie Gifford to stop investing in fossil fuel-linked businesses, and said if that demand wasn’t met, that Edinburgh should find alternative sponsorship for 2024 – and if it didn’t, authors should boycott the 2024 festival. More than 50 authors and event chairs signed it, including Zadie Smith, Ali Smith and Katherine Rundell.

Less than a year on, FFB holds open weekly meetings for its supporters, and the campaign has become a major talking point in the literary community. Its stance has proven divisive: though 800 writers and publishing industry professionals have now signed FFB’s most recent statement, criticism of the group has been widespread.

The Guardian’s financial editor Nils Pratley wrote in his column last week that “in a ranking of climate villains in the fund management industry, Baillie Gifford would surely come a long way down most people’s list”, since, as the asset manager has repeatedly said in its responses to FFB’s campaign, only 2% of the assets it manages are invested in fossil fuel companies, versus an industry average of 11%.

Now, even though Baillie Gifford’s relationships with UK literary festivals have come to an end (the firm remains the sponsor of the country’s most prestigious prize for nonfiction, the Baillie Gifford prize), “not a dime has been divested from fossil fuels”, wrote environmental writer Mark Lynas, author of Our Final Warning: Six Degrees of Climate Emergency, in a blog post. “All that’s happened is that literary festivals now have huge holes in their budgets.”

The campaigners I’m speaking to don’t dispute that the outcome is not ideal. “I wouldn’t call it a victory,” Hamilton says. Gunaratne notes that several of the statements put out by festivals when their ties with Baillie Gifford were broken mentioned their positive relationship with the firm. “It was that relationship that we were trying to get them to leverage in order to talk to them about divesting,” they explain.

Speaking to the Guardian last month, a spokesperson from Baillie Gifford claimed that divesting in the way FFB asks would not be possible. “We are managers of other people’s money, not our own,” they said. “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.”

According to FFB, the fact that Baillie Gifford decided to walk away from these sponsorships rather than explore taking steps to alter its portfolio highlights the problem. “How sustainable of a system is it to have a festival that is so dependent on one corporate sponsorship that would rather pull out instead of divesting from specific companies?” Gaitán Johannesson asks.

But though the outcome is not what FFB had hoped for, Gunaratne is optimistic that this could be a “transformational moment” for book festival funding. They point to 2016, when authors asked to get paid for appearing at festivals. Until then, writers were often expected to speak for free; now a fee is usually offered. “At the time, people were saying that festivals as we know it will cease to exist,” Gunaratne adds. “And that is true. It did change and it did adapt but the festivals did carry on in a more equitable way.”

“We’re in the middle of a long and difficult process of change, but it is happening,” Hamilton says. FFB don’t see Baillie Gifford’s pulling out as a final result, but as “step one or step two of an ongoing strategy,” Reynolds adds.

FFB has been accused of hypocrisy: the companies which have commercial dealings with the state of Israel that the group called on the firm to divest from include Amazon, on which most authors sell their books, and Meta, the owner of Facebook and Instagram, the latter of which has been used by FFB to circulate its campaign.

The choice to focus on Baillie Gifford was “not about moral purity” but “about strategy”, Reynolds says, as influencing the asset manager seemed like it could be achievable.

Whether an author’s book is sold on Amazon is “something that we can’t control,” says Hamilton. “That’s the decision that our publishers make for us, it’s something that we don’t have enough leverage over right now to actually make any impact.”

“If we can organise enough authors then maybe we can organise enough power to make a change with something as big and powerful as Amazon,” he says, but believes that right now is not that time.

Meanwhile, the idea that the lack of adequate funding for festivals is “on our shoulders” is “completely absurd”, Reynolds says. Those looking for where to place blame should “look at the last 14 years of Tory austerity and budget cuts,” she says. “Arts funding has been decimated.”

While the group is hopeful that state funding for the arts might improve after the election next month, they are not against corporate sponsorship. “There are other companies” that the group do not believe to be “complicit in human rights abuses” that “would probably like to invest [in festivals]”, Gaitán Johannesson thinks. She mentions Bradford literature festival, which recently announced its new partnership with Network Rail. Though “it’s a partnership not a sponsorship” – the company will provide advertising rather than directly transferring money – “it shows that there are possibilities in creating new ways of funding festivals, there are small steps forward”, Gaitán Johannesson says.

Now that the Baillie Gifford sponsorships have ended, FFB wants “to continue having conversations with festivals, because we want to be part of the transition to a more sustainable model.” That’s what is “immediately next” for the group, Gaitán Johannesson says.

And in the longer term? The authors are hazy on the group’s future – it depends on what the collective as a whole decides, they say. But “we want to work with the industry” Gaitán Johannesson says, and “continue growing to transform that industry so that it’s more in line with the values that these literary spaces claim to uphold.”