Investments in coal, oil, and gas increase financial risk without increasing returns, according to the new report Climate proofing your investments: Moving funds out of fossil fuels published by The Australia Institute.

To meet the internationally-agreed two degree global warming limit, fossil fuel businesses must leave in the ground two-thirds of the reserves currently on their books. Failure to incorporate this risk is causing inaccurate share valuations.

The report includes the first simulation comparing performance of an Australian fossil fuel free investment portfolio with an indexed ASX portfolio and It identifies a series of ASX-listed companies that are most at risk of stock devaluation due to climate change.