Align Wealth with Your Values: Ethical Investing

Written by Brad Laird

In today's interconnected world, many investors are starting to look beyond just financial returns. This shift in perspective has fuelled the growth of ethical investing – an approach that aligns financial goals with personal values and societal concerns.

At its core, ethical investing involves choosing investments based on Environmental, Social, and Governance (ESG) factors. The aim is to build a portfolio that not only generates returns but also reflects your values and commitment to sustainable and responsible business practices.

The good news is that ethical investing has moved from the fringes to the mainstream. As awareness around sustainability and social responsibility has grown, so too has the range of investment options available. Whether you're interested in renewable energy stocks or ETFs that screen out controversial industries, there are plenty of ways to tailor your portfolio to your values.

Of course, with more choice comes more complexity. Figuring out which investments genuinely meet high ethical standards can be tricky and time-consuming. That's why many people opt to work with financial advisers who specialise in responsible investing or use screening software to do the heavy lifting.

It is important to be aware of "greenwashing," a growing concern in the ethical investing space. Greenwashing is when companies or funds exaggerate or falsely claim their environmental or social credentials. Unfortunately, not all ESG-labelled investments are as green or ethical as they might seem, leading to investor disappointment and increased regulatory scrutiny.

It's worth noting that ethical investing doesn't mean sacrificing performance for principles. While some once believed that responsible investing might hurt returns, numerous studies have shown that ESG-focused portfolios can perform just as well, if not higher over the long term.

As more people recognise this, ethical investing is set to keep growing and evolving. Whether you want confidence about where your money is going or simply want to avoid certain industries, there's never been a better time to align your investments with your values.

To take the next step in your ethical investing journey, contact Salt’s Financial Planning team. We can assess your individual ethical preferences and recommend products that align with your views, helping you create a portfolio that reflects both your financial goals and personal values.