If you're wondering whether the money you have invested in the stock market is harming the planet, perhaps the time has come to find out which companies have decided not to invest in fossil fuels and what "fossil free" indices look like. The most recent is the Australian Fossil Free Index, born from a collaboration between Thomson Reuters and Future Super – the first large Australian pension fund whose investments do not involve activities connected to fossil fuels.

Also contributing to the heightened awareness of sustainable investment is the Divest from fossil fuels campaign, promoted by 350.org, which calls on multinational companies, institutions, insurance companies, pension funds and foundations to divest from fossil fuels.

Today, divestment from fossil fuels is rapidly shifting from being ethically sound to being economically sound. As John Quiggin noted in 2014, "looking only at the hard, cold numbers of investing money in fossil fuels is not good." Much of the scientific community, as well as the International Energy Agency, argue that to avoid the dangerous effects of global warming, we need to leave the vast majority of the world's untapped fossil fuel resources in the ground. In the meantime, we must stop burning the fossil fuels we already have, starting now.

What does it mean to divest from fossil fuels?

Divestment is the opposite of investment: it is the removal of invested capital from stocks, bonds or funds. The global fossil fuel divestment movement calls on institutions to withdraw their money from oil, coal and gas companies for both moral and financial reasons.

Why divest?

Almost all the arguments in favour of divesting from fossil fuels are essentially tied to moral and financial motivations.

The moral case is fundamentally grounded in the data. Scientific research shows that in order to meet the target of limiting maximum temperature rises to 2 degrees Celsius and avoid climate catastrophe, between two-thirds and four-fifths of currently available fossil fuels must be left in the ground. From a financial standpoint, the motivation is linked to the fact that if the international community reaches an agreement on climate change, investments in fossil fuels will lose their value.

Who has divested?

More than 220 institutions around the world are committing to some form of divestment from fossil fuels, including pension funds, foundations, universities, religious organisations and local authorities.

A coalition of philanthropic foundations, among them the Rockefeller heirs, has begun divesting from the sector, as have several major cities including San Francisco, Seattle and Oslo. Even the world's largest sovereign wealth fund, the Norwegian Government Pension Fund (Global GPFG), has exited investments in 114 companies, including tar sands producers, on climate grounds.

We all use fossil fuels – isn't divesting hypocritical?

Most of the goods and services we use in daily life – from heating to plastics – are dependent on fossil fuels. But the movement opposing investment in oil, gas and coal argues that fossil fuels are pushing us towards an epochal climate crisis and that the world needs to shift its energy paradigm quickly and embrace renewable sources.

Is my money invested in fossil fuels?

Almost certainly. The majority of banks have millions of euros invested in companies operating in the fossil fuel sector. Most investment funds, including the multi-billion-pound pensions industry, have invested heavily in fossil fuels and do not offer savers a fossil free option, even though demand is on the rise. For public information on all funds you can visit morningstar.it or Finanza sostenibile.

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