New York City’s recent announcement that it will be the first city to divest from fossil fuels in its $189 billion pension plans by 2020 sends an unmistakable message that a stronger economy rests on a greener planet. The decision by the city, one of the largest holders of pension funds in the world, is a significant step forward for those who care deeply about environmental causes.

At the same time, the news raises important questions for investors about whether they ought to follow suit. For many of us, including wealth managers, pension managers and investment advisors, the question is what does divestment mean? And what does divestment look like at the portfolio level?

Where to start?

While fossil-fuel securities generally comprise 2-8% of any given portfolio, it depends how one is defining the exposure. Most of us would expect to see a sell-off of the five “big players:” BP, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell. Not only are these five companies counted historically as some of the largest polluters, they are the five corporations named in New York City’s lawsuit for to their contribution to global warming. The court case is seeking billions to build climate-driven infrastructure projects to protect the city against future climate-related storms that Mayor De Blasio says these companies have caused.

When it comes to building a fossil-fuel-free portfolio, we might all agree that the companies extracting oil from the Earth should be the first to go. Many portfolio managers stop there. Others use the list of the 200 top fossil-fuel producers generated by Carbon Underground.

I have a few issues with this approach. It may not actually produce the social, environmental or financial results investors are hoping to achieve. By removing the largest 200 companies, an investor will be stuck with smaller extracting companies (such as PDC Energy or Miller Energy Resources). That could pose more risk to a portfolio because these smaller companies have even less bandwidth to transition their business models to the needs of a cleaner economy.

As it turns out, socially responsible investing (SRI) and now, the more popular term, environmental, social and governance (ESG) methods of screening indexes and stock portfolios are not perfect. In fact, slicing out different companies, industries and sectors of a diversified portfolio can still leave a portfolio with many polluting companies and businesses that contribute to climate change. For example, MSCI has created a fossil-fuel free index. However, while many extracting companies are removed, Toyota (a company whose products rely on the consumption of vast amounts of oil) remains as a top holding. Similarly, JP Morgan Chase and Bank of America, both well known for their funding of fossil-fuel projects including pipelines, are top holdings in several “fossil-fuel free” advertised portfolios.

MSCI has created a fossil-fuel free and a coal-free fund. However, I have been unable to locate an investment offering that removed both coal and fossil polluters. Another problematic example of a touted fossil-free fund from one renowned SRI firm includes several large banks well known for funding fossil-based oil pipelines. The sleight-of-hand in this method of slicing out one particular industry is that several fossil-fuel-free portfolios have tobacco producers and/or alcohol companies as a lead portfolio holdings.

One might guess that those investors who do not wish to hold fossil fuels do not want exposure to coal. That reluctance could be for the financial risk factors of holding companies which are losing market share to the clean energy technologies or for the strategic play to send the powerful message of divestment.

Those who wish to use divestment as a lever for making a difference for the climate do not want to support any part of the fossil-fuel or any of the extractive industries, including coal mining. In truth, many of those convinced the transition to the next, clean and sustainable economy is on its way want to leverage our portfolios to encourage a speedy transition. For that purpose, many do not want exposure to any of the incumbent economy business models.

As an early signatory to the divest-invest movement and a solutions-focused portfolio manager, I will be very interested to see how the New York pension managers go about making the shift to a fossil-fuel-free portfolio. For both investors and advisors, the decision is also catalyst for thinking differently about how capital is invested.

Kristin Hull the Founder, CEO and Chief Investment Officer of Nia Impact Capital