Understanding Divestment: What It Means and Why It Matters

Divest means to sell or give away an investment or asset that is considered to be a liability or a negative influence. It can also refer to the act of removing oneself from a situation or relationship that is no longer beneficial or desirable.

For example, a company may divest itself of a subsidiary that is not performing well in order to focus on more profitable ventures. Similarly, an individual may choose to divest themselves of a possession that is no longer serving their needs or bringing them joy.

Divest can also be used as a verb, meaning to rid oneself of something negative or unwanted. For example, "I'm planning to divest myself of my old car and buy a new one."

In the context of investing, divestment refers to the process of selling off investments in companies or industries that are considered to be harmful to the environment or society. This can include fossil fuel companies, tobacco manufacturers, or other businesses that have been criticized for their ethical or environmental practices. Divestment is often used as a way for individuals and organizations to align their investments with their values and promote sustainability.