“Greed is good,” says Gordon Gekko in the 1987 film 

. But we’re nearly halfway through the 2020s now, and the socio-political paradigm has shifted since the era of contrast collars and brick-sized telephones. Several financial firms have started to make “sustainable and ethical” investment decisions. Usually, this means investing in businesses that have good practices regarding the treatment of their workers and the planet. However, critics argue that it is financially unwise for individuals to place their hard-earned cash into the hands of “moral investors” who promise to generate profit while prioritizing social ethics simultaneously. So, what’s the answer?

There are a number of “ethical firms” to choose from, including Betterment, EarthFolio, SVX, Empower, and Ellevest. Betterment offers “socially responsible investing” through proclaimed cost-effective, diverse ETF portfolios. One can choose from investing in “Climate Impact,” “Social Impact,” and “Broad Impact” portfolios. However, the higher the percentage of bonds to stocks you choose, the lower the percentage of the portfolio will be allocated to socially responsible investments.

An article hidden away on the Betterment website is titled “Will the Betterment Core Portfolio Beat the Market?” The answer from the Betterment team is, “The Betterment Portfolio is not designed to beat the market, which is difficult to do with any certainty and involves a lot of risk.”

Of course, beating any country's market, from the S&P 500 to the FTSE 250, is a very hard task. However, customers are not filled with promise when reading on. The article goes on to explain that the mix of securities chosen by the investment team is diverse enough to reduce the effects of a volatile market. Anyone who has dipped their toes into the world of investments will understand the risk-reward dynamic, which is hardly a groundbreaking revelation.

These investment firms are treading a very fine, unenviable path in terms of their image. They must appear to be socially responsible and conscious activists while admitting that they will actually make money for their clients. Furthermore, on most of these investment sites, such as EarthFolio, they’d like to hand you the reins on your balance between “moderate” and “high growth.” It appears that this is a masked choice about how “conscious” you’d like your investing to be relative to your returns.

Yet, credit must be given where it is due. These sustainable and ethical investment firms are not attempting to scam clients out of their money. Quite the opposite. They are open about the risk and long-term nature of these investments. If you are looking to make quick cash with a short turnaround time, this is not for you. The exposure of these firms is usually quite good as well, as most invest in a broad range of technology companies that have survived the pandemic, Brexit, and the UK and US elections. If you have some spare cash that you’d like to invest, do check out their websites. But, be aware that this is not BlackRock or Vanguard that you’re investing with.

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