Ethical investing, also known as socially responsible investing, has increased rapidly in recent years. It involves selecting investments that align not only with your financial goals but also with personal values such as environmental sustainability, social justice, and good governance. For instance, if an investor is against animal testing, then they’ll be conscious of investing in companies that are against this practice.  

As more people become aware of the influence their investments have on the world, ethical investing has emerged as a meaningful way to build wealth while contributing to a positive societal impact. According to The Times, data from Bloomberg reported that $50 trillion is expected to be allocated into ethical investing by the end of 2025. For those who are looking to apply this practice into their investment portfolio, there are key benefits to consider.

One of the most immediate benefits of ethical investing is the ability to ensure that your financial choices reflect your personal values. Whether you’re passionate about climate change, worker rights, gender equality, or ethical sourcing of materials, ethical investing allows individuals to vote on specific causes with each dollar allocated towards them.

According to the Global Impact Investing Network, impact investments made with intentional goals of social or environmental impact can generate measurable, positive outcomes while still offering competitive returns.

By investing in businesses with sustainable practices or those that contribute to solving social issues, such as poverty alleviation or providing access to clean energy, investors can contribute to building a more sustainable and equitable environment.

Research has shown that sustainable and responsible investment strategies can be just as profitable, if not more so, in the long term. In fact, according to Morningstar, several climate and net-zero aligned indexes outperformed the anticipated returns in 2024.  

Investors are also making a greater effort in increasing their sustainability portfolio, as per Morgan Stanley. In 2024, 77% of individual global investors said they are interested in achieving market rate financial returns with the consideration of socially and/or environmentally positive impacts.

Ethical investing can help lower the overall risk profile of your investment portfolio. By focusing on companies that are committed to sustainable and ethical business practices, investors are less likely to encounter reputational risks, regulatory penalties, or fines due to poor environmental practices or unethical business behaviors.

Ethical investing may encourage greater corporate transparency and accountability. Companies or funds who are committed to environmental, social, and governance principles (ESG),may disclose their environmental impact, labor practices, and governance structures to display openness to investors.  

Sustainable funds and ethical investment products may also require reporting on these factors, giving investors more insight into how their money is being used. One thing to note is that there are both federal and state ESG regulations to consider, which may impact both investors and companies depending on where they’re located in the US. For instance, states such as California, New York, and Minnesota have enhanced ESG legislature in place for review.  

Ethical investing offers a unique opportunity to achieve financial growth while simultaneously contributing to a positive social and environmental impact. By aligning investments with personal values, promoting sustainability, managing risk, and capitalizing on a growing trend, investors can build wealth in a way that feels both rewarding and responsible. Now may be the perfect time to consider the benefits of investing in alignment with specific values.

Written by: Taylor Bushey

ProCore Advisors is a Registered Investment Advisor in the states of California, Oregon, and Texas. Reference to registration does not imply any particular level of qualification or skill. Investment advisory services available only in jurisdictions where ProCore Advisors is appropriately registered. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities.