Sustainable Investing: Aligning Your Portfolio with Your Values

tldr; You’ll learn how to grow your wealth without watering down your values.

The world of finances is akin to a long trek across a desert, buzzards overhead and no water in sight. Capitalism, in its rawest form, thrives on exploitation: of people, of resources, of the land, which feels…well wrong. For the longest time, I avoided investing entirely because it felt like choosing between survival and my values.

Eventually, living in a state of permanent financial drought lost its charm. I started to dig into sustainable investing and realized there is actually a path to grow your money without investing in climate collapse, wage theft, or weapons of war.

This guide walk you through what sustainable investing really means, how to spot greenwashing, and how to build a portfolio that grows your financial independence while also reflecting your ethics.

disclaimer: despite doing my best to define this, corporations will be corporations. It is always best to validate whether or not a company actually aligns with your values. For example Proctor & Gamble is ESG rated, but they also just built a Research facility in Tel Aviv Israel (which you may have mixed feelings about if you’re opposed to genocide).

What is Sustainable Investing

Sustainable investing goes by a few names (ESG, SRI, impact investing), but the idea is simple: use your money to support things you think are good.

A Quick Sustainable Investing Glossary

ESG (Environmental, Social, Governance)

Environmental factors: Carbon emissions, resource usage, pollution, renewable energy adoption, waste management
Social factors: Employee relations, diversity and inclusion, human rights, community engagement, data privacy
Governance factors: Board composition, executive compensation, business ethics, transparency, shareholder rights

SRI (Socially Responsible Investing)

SRI typically involves exclusionary screening—avoiding investments in companies or industries that conflict with an investor’s values:

Common exclusions include tobacco, weapons, gambling, adult entertainment, and fossil fuels.
May also screen based on religious values, animal welfare concerns, or other ethical considerations
Historically the oldest form of sustainable investing, dating back to religious investors avoiding “sin stocks”.

Impact Investing

Directly funds projects or companies aiming for measurable social or environmental change.
Think solar microgrids in underserved communities or women/queer-led startups in emerging markets.

Thematic Investing

Thematic investing concentrates on specific sustainability trends or challenges:

Focuses on causes you care about: renewable energy, clean water, healthcare, LGBTQ+ equality, gender quality, etc.
Often via ETFs or mutual funds centered on one mission.

This approach allows investors to focus on areas they’re particularly passionate about while potentially capitalizing on long-term sustainability trends.

Greenwashing Alert

Not every fund with “green” or “sustainable” in the title lives up to it. Do your own research. Check holdings. Use sites like Fossil Free Funds or As You Sow to evaluate your choices. In general it is better to trust what you’ve learned about a company that to have the company tell you, “Trust us we are the best thing for planet earth 😉”. You know what your values are better than anyone, so trust you will make the right choices.

The Growth of Sustainable Investing

The good news is investing ethically doesn’t mean you’re doomed to low returns.

ESG portfolios often perform as well or better than traditional ones.
Companies with strong ESG practices tend to be more resilient during downturns.
Millenials, women, and queer folks are driving demand for values-aligned investing. Meaning more options and pressure on companies are growing.

Not to mention, sustainable investing will let you support the kind of world you actually want to live in, vote with you money, this is the love language of capitalism. Support companies who care about their workers, the planet, and their impact on marginalized communities.

How to Build a Sustainable Investment Portfolio

Step One: Define What Matters to You

Ask yourself:

What industries do I want to swerve from?
What issues do I support and I’m passionate about? (climate, racial justice, gender equality, etc.)
Do I want to prioritize returns or impact? Maybe both?
Do I want to be hands-on (picking stocks) or automated (set and forget) approaches?

Step Two: Choose Your Tools

You can build a sustainable portfolio using:

Robo-advisors:

Ellevest – Designed by women, with gender-lens investing
Betterment – Offers SRI portfolios with different focuses
Wealthfront- Offers SRI approaches to investing

ETFs and Mutual Funds:

Vanguard ESG U.S. Stock ETF (ESGV) – Broad U.S. ESG exposure
Parnassus Core Equity Fund (PRBLX) – Actively managed, socially screened
Domini Impact Equity Fund (DSEFX) – Prioritizes racial and gender equity
SPDR SSGA Gender Diversity Index ETF (SHE) – Focused on women in leadership

DIY Investing:

Buy individual stocks of B Corps, clean energy companies, or those with strong ESG ratings.
Consider green bonds or community development financial institutions (CDFIs) if you want to support local or environmental causes.

You can checkout my article on investing basics if you’re trying to figure out some of the things to consider when balancing your own portfolio.

Step 3: Watch Out for Fees and Fluff

Sustainable funds can carry higher fees. Compare expense ratios.
Look into what “sustainable” means for each fund. Some are more bark than bite.

Step 4: Set It and Check It

Automate investments if possible
Review annually (or when your values shift)
Use tools like Morningstar or MSCI ESG Fund Ratings: to track ESG performance

Additional Resources:

Research Platforms

Gender Equality Funds: Evaluates funds based on gender equality metrics
Deforestation Free Funds: Examines fund exposure to deforestation risk

Sustainable Investment Forums

Sustainable Investing That Reflects You

If you’re queer, femme, disabled, or just deeply skeptical of systems that weren’t built with you in mind. Then traditional investing advice might feel alienating.

But sustainable investing? It can be a reclamation. A way to participate in capitalism on your own terms and nudge the system in a better direction as you go.

Is it perfect? No. But it’s a start. And it’s better than sitting on the sidelines while your savings lose value to inflation.

Start small. Start now. Let your money grow like a garden you actually want to live in.

Affiliate Disclosure: Some links in this article are affiliate links, which means I may earn a small commission at no extra cost to you. I only recommend products I trust and believe will help you on your financial journey.

~Melon

TODO: Expand on this article using more info about how to avoid the assumption that just because something is ESG means it’s good. it’s always critical to do your own research, as much as I would like to say, just trust me. I’m human I make mistakes, and I only have so much time in a day to screen for my own ethics and values.

Mainstream ESG ratings often fall short of truly reflecting a company’s ethical standing, especially when it comes to complex political or humanitarian issues. Research in 2025 highlights several persistent problems with ESG ratings, including:

Divergence and Inconsistency: Major ESG rating agencies (like MSCI, Sustainalytics, ISS) often disagree significantly, with correlations as low as 0.42–0.47, due to different methodologies, data sources, and subjective weighting of factors1 4 5 6.
Greenwashing: Companies can strategically highlight positive ESG metrics while downplaying or omitting controversial activities—such as involvement in politically sensitive regions or conflicts—leading to misleadingly high ESG scores1 3.
Opaque Methodologies: The lack of transparency in how ESG scores are calculated makes it difficult for investors to assess the true ethical impact of a company’s activities, especially regarding contentious geopolitical issues3 8.
Limited Political Context: Most ESG frameworks focus on environmental, social, and governance factors as defined by Western financial markets, rarely incorporating nuanced political or human rights considerations—like a company’s operations in regions accused of human rights violations1 3 5.

Are There Grounded, Politically-Aware ESG Sources?

Currently, no major ESG rating system systematically incorporates political or humanitarian controversies (such as a company’s presence in a conflict zone) into their core scores in a transparent, consistent way1 3 4 5. Most ratings are designed for comparability and regulatory compliance, not for reflecting the full spectrum of ethical or political concerns an individual investor might have.

What Alternatives Exist?

Disaggregated ESG Data: Some providers (like RepRisk) are moving toward more granular, incident-based scoring, which can highlight specific controversies (e.g., involvement in occupied territories, labor rights violations)7. This approach allows investors to see beyond the aggregate ESG score and focus on issues that matter to them.
NGO and Watchdog Reports: For issues like human rights, labor practices, or involvement in controversial regions, independent organizations (e.g., Human Rights Watch, Amnesty International, BDS Movement) often publish lists or reports naming companies involved in problematic activities. These are not investment-focused but can be cross-referenced with dividend stock lists.
Custom Screens: Some platforms allow you to build custom exclusion lists based on controversies or involvement in specific countries or activities. This requires more manual research and diligence.
Emerging “Values-Based” Funds: A few asset managers and ETFs are experimenting with values-based or faith-based screens that go beyond traditional ESG, but these are still rare and may not fully address your concerns.

What Should You Do?

Use ESG Ratings as a Starting Point, Not the Final Word: Treat mainstream ESG scores as a baseline for environmental and governance practices, but supplement with your own research on political and humanitarian issues1 3 4 5 8.
Leverage Disaggregated Data and Controversy Trackers: Seek out platforms or data providers that offer controversy-specific tracking, or regularly updated news feeds on company activities in sensitive regions7.
Cross-Reference with NGO Reports: Before investing, check whether a company is named in reputable human rights or political advocacy reports for involvement in controversial activities.
Consider International Dividend Stocks: If you are open to foreign investments, look for companies in countries with strong human rights records and transparent governance, but always do your own due diligence.

Summary

There is currently no single, universally trusted source that combines robust ESG ratings with a nuanced, politics-aware ethical screen for dividend stocks. The best approach is to use ESG ratings as a tool—while recognizing their limitations—and supplement them with independent research on political and humanitarian issues that align with your values1 3 4 5 7 8. This may require more manual effort, but it is the most reliable way to ensure your investments truly reflect your ethical standards.