Many people choose to invest their money without considering the social or environmental implications of their investment choices. However, with a little research, it is possible to invest ethically. This is part one of a two-part series designed to define ethical investing while providing some tips on how to get started.

What is ethical investing?

Ethical investing is an investment strategy that takes into account both financial return and social/environmental good. It is also known as sustainable, responsible or impact investing. Ethical investors seek to invest in companies or funds that align with their values, and avoid those that are involved in activities they deem to be harmful.

There are a number of different approaches to ethical investing, and what may be considered ethical varies from person to person. Some common themes include avoiding investments in tobacco, alcohol, gambling, pornography, arms manufacturing and fossil fuels; and instead supporting renewable energy, fair trade and companies with good environmental practices.

Many people believe that it is possible to make money while also doing good – that is, to have a positive impact on the world through their investments. With the growth of ethical investing over recent years, there are now a range of options available for those looking to invest ethically.

The difference between ethical and sustainable investing

When it comes to investing, there is a lot of talk about sustainability and ethics. But what exactly is the difference between the two?

Sustainable investing is all about taking into account environmental, social and governance (ESG) factors when making investment decisions. This means looking at things like a company’s carbon footprint, its treatment of workers, and its involvement in corruption. The aim is to invest in companies that are doing their bit to make the world a better place, and to avoid those that are causing harm.

Ethical investing takes things a step further. It’s not just about ESG factors, but also about personal values. For example, some people may want to avoid investing in companies that produce alcohol or tobacco, or those that are involved in military weapons or gambling. Others may want to invest only in companies that support green energy or that have a good record on human rights. It’s really up to the individual investor to decide what their ethical boundaries are.

The important thing to remember is that both sustainable and ethical investing can help you make a positive impact on the world, while still earning a financial return on your investment.

The Bottomline

It is possible to make a difference, and have a good return on your investments, but it takes a little more work. But in the end, it is worth it for socially-conscious investors. Check out part two tomorrow and learn practical tips and tools on ethical investing. But with any investment please seek qualified professional help before making any decisions.