# Divestment

*ESG & Sustainable Finance — Finicade finance glossary*

Divestment is selling holdings in an industry on principle, most prominently fossil fuels. Its financial effect on the seller is a portfolio tilt; its effect on the target works only if enough capital exits to raise their cost of capital, and evidence for that is weak while willing buyers remain. Its clearest documented effects are stigmatisation and shifting political conditions rather than direct financial pressure.

**Also known as:** fossil fuel divestment, disinvestment

**Related terms:** [Socially Responsible Investing](https://finicade.com/glossary/socially-responsible-investing), [Stewardship](https://finicade.com/glossary/stewardship), [Stranded Asset](https://finicade.com/glossary/stranded-asset), [Cost of Equity](https://finicade.com/glossary/cost-of-equity), [ESG](https://finicade.com/glossary/esg)

Source: https://finicade.com/glossary/divestment