Understanding divestment

Divestment means moving money away from funds for financial, ethical, or other reasons. It is the opposite of investment. This could include disposing of stocks, bonds, or investments.

Fossil fuel divestment is when an organisation or individual moves their money away from businesses involved in the extraction, production, transportation, refining and marketing of fossil fuels. Examples of these fuels are coal, tar sands, oil and gas.

The aim of fossil fuel divestment is to:

• reduce further greenhouse gases being released into the environment
• reject investment opportunities in order to weaken the fossil fuel industry’s political influence.

Every time an organisation publicly divests from fossil fuel businesses, we:

• weaken their social license (the view by the public that an area of work is socially acceptable)
• weaken the fossil fuel industry’s ability to operate
• help to apply greater pressure on decision-makers to change future law and policy
• move one step closer to securing a brighter, more sustainable future for our communities.

Charities exist to make the world a better place. It will be difficult to achieve this goal if we allow climate change to continue.

We believe charities should consider divesting from fossil fuels to avoid the worst effects of climate change and secure a brighter future for our communities.

Now you’ve had the chance to understand more about divestment, learn more about the reasons your charity should consider divesting from fossil fuels.