Ethical investing


#1

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?


#2

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.


#3

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.


#4

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.