Fossil Fuel Divestment: A Practical Introduction
categories: ESG Products & Services, Research Paper, Issue Brief, EASTMAN Meggin Thwing, general
This brief is aimed at institutional investors facing the possibility or necessity of divesting from some type of fossil fuel holdings. Approaches to explicit divestment have multiplied since the early days of the Carbon Tracker 200 list, as investors now have a better understanding of mechanisms to manage carbon in portfolios, including using revenue and power generation data in addition to reserves ownership. We found that the most common approaches are designed to optimize for fossil fuel elimination, carbon reduction, engagement, and stranded asset risk mitigation using narrow, moderate, or broad exclusionary criteria.