Fossil fuel divestment is one of the major levers at the disposal of citizens and governments to address climate change and accelerate the transition to a clean economy. For many investors, a key issue is whether divestment is a smart decision in terms of financial performance.

From a smart investing perspective, the answer is “yes.”

Divestment is a wise financial decision judging by the performance of fossil-fuel-free portfolios. Reallocating that capital to innovative new technologies that support clean, renewable energy can also improve portfolio performance. Investors face significant risk in holding securities tied to the incumbent fossil-fuel economy.

For instance, Nia Global Solutions portfolio, which is fossil-fuel free by design significantly outperformed the S&P500 Index — by 15.77% over the last year. Nia portfolio’s outperformance is due in large part to our emphasis on investing in renewable energy innovations, such as wind and solar technologies.

As a founding signatory for the Divest Invest movement, I have been quite vocal about the effectiveness of fossil fuel divestment. At Nia Impact Capital, we recommend divestment from stocks of any firm engaged in the prospecting, extraction, refining, transporting or distributing of fossil fuels due to both the financial and environmental risks.

Read the full article about divestment from fossil fuels by Kristin Hull at Medium.