Ethical investing

I have a 401k at work. Yay! But I don’t feel great about investing in most of the companies that show up in an index fund. Like, in all other areas of my life, I am very intentional about supporting small, local, climate-forward, compassionate enterprises - I want to kill cars, I don’t want my money in effing Exxon. Are there any, like… ethical mutual funds? Renewable energy companies or b corporations or something? Or am I just doomed to selling out?

And related: if I wanted to buy bonds for my city/county/state specifically, how could I do that?

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There are definitely ethical funds out there; I believe most large companies that sell funds have an ethical fund. You’ll have to check the holdings of each individual fund to better understand how they apply those ethics; I believe that some folks over on MMM found out that some “ethical” funds still had e.g. Exxon or other questionable companies in their holdings.

One thing to note is that diversification becomes harder when you apply any sort of constraint (including ethics). You can still do it, of course, but you’ll have to work harder at it than you would just buying a few different index funds.

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Ethical funds have weird definitions of ‘ethical’. Like, no booze but oil companies are fine, often.
I like investing in things I believe in instead of excluding things I hate, when possible. So a green energy technology fund, for example. I own shares in my local carshare co-op. Stuff like that.

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I also remind myself that, unless I get in on the IPO, I’m not really doing a company any favors by owning its stock. It helps.

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(Apologies for posting on an old thread, but I figured people might have thoughts)

I have also been feeling increasingly uncomfortable with having my investments totally divorced from the way I want to impact the world (as a lot of my motivation for FIRE is to be able to contribute to the world in a way that I think is more important without worrying about making money from it).

I have found, I think, some viable alternative index funds that look to be better than what I’m using now, and are relatively low-fee (I’m looking at one that tracks the FTSE climate-balanced index).

I am also wanting to move towards Smacky’s model of investing in specific organisations that I think are actively doing good - but I don’t really know where to start with that. Does anyone have any advice for places to look for projects that need investment? (I’m UK based but happy to invest anywhere really - my well off, fairly green city is probably not where investment is needed most)

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@beep_boop
I’ve done some zero interest loans:

  • To a local coworking space for them to make some capital improvements
  • To a local food co-op to fund their opening
  • Via kiva.org to people seeking 3-4 digits of loans for their business, farm, family, etc.

Investments where you also want a %age return are different ball of wax. I’ve experimented with a few things but still gathering my thoughts here…