Investors are increasingly aware of climate-related risks. One response has been to divest from fossil companies, which by supplying fossil fuels are responsible for the source of emissions and are most vulnerable to financial impacts.
What motivates investors to fossil divest? A desire to halt extraction of carbon-dioxide generating fuel reserves, while avoiding fossil company investment risks, which are estimated to lose $34 trillion of revenue from future policy and technology. Differing definitions can confuse those considering this approach. Investors also debate whether engagement is more effective at influencing fossil companies. This article discusses what fossil divestment involves, clarifying some ‘grey areas’.
Q G Rayer and T Harrison (2019), Fossil divestment: investing against global warming, DISCUS, available at http://discus.org.uk/fossil-divestment-investing-against-global-warming/, 4 pages, 27 June 2019.