Personal Finance

How to extract fossil fuels from your investment portfolio

Yuriko Nakao | Bloomberg | Getty Images

Quick: What are the "three Fs" of investing? Fossil, fuel and free.

Students on dozens of campuses have been demanding that their universities divest themselves of fossil fuel companies. A handful, from Unity College in Maine to San Francisco State University, have vowed to do so. The movement isn't limited to campuses, either. Seattle committed to fossil fuel free operations last December, and other cities have followed in the past month, including Northampton, Mass.

Such an investment shift is feasible for a major institution or municipality with sophisticated, professional money managers, but what about for the rest of us? If you are not part of the wealth-management class and are interested in keeping your investments fossil fuel-free, your options are somewhat more limited.

You have choices, however, from financial planners expert in socially responsible investing to mutual funds. And you don't have to sacrifice performance.

(Read more: Students are clamoring for fossil fuel divestment)

"There are no guarantees on anything, but there is evidence that you can do it and get market returns or better," said Matt Patsky, CEO of Trillium Asset Management. In fact, according to research published earlier this year by Impax Asset Management, "historical data shows that over the past seven years eliminating the fossil fuel sector from a global benchmark index would have actually had a small positive return effect."

One way to explore fossil fuel free investing, is with a financial planner. A number of firms have experience with fossil fuel free investing.

(Read more: 'Beyond Petroleum?' BP Ggoes back to basics)

RBC Capital Markets has a division called SRI Wealth Management that can help clients create fossil fuel free portfolios, and companies like Progressive Asset Management support networks of investment consultants who can work with clients on eliminating fossil fuels from their holdings.

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Trillium helps institutional clients and wealthy individuals remove fossil fuels from their holdings, and also manages some fossil fuel-free mutual funds.

Trillium is the subadministrator of the Green Century Balanced Fund, which invests in companies that are involved in what it calls "environmental innovators" or that otherwise meet its criteria for environmental responsibility. The Green Century Equity Fund invests in names in a well-known index of environmentally sustainable companies, the MSCI KLD 400 Social Index. Both have three-star ratings overall from Morningstar.

Another equity fund option is Portfolio 21, which says it "invests in companies designing environmentally superior products, using renewable energy, and developing efficient production methods."

(Read more: Solar stocks' day in the sun, or just a flare? )

Shelton Green Alpha Fund was offered to investors only in March, so it doesn't have much of a track record yet.

That fund's arrival is in line with what Patsky described as investment firms' nascent response to the wave of interest in fossil fuel-free investing. He expects a field Trillium has been in for years to soon become crowded—not great for Trillium, but consumers will have more choices.

"Solutions are coming," he said. "You're going to see it before the end of the year. It's in process in enough firms."

—By CNBC's Kelley Holland. Follow her on Twitter @KKelleyHolland.