After greening your bank, your credit card, and making small investments for social good; if you are ready to take the next step to move towards environmentally and socially responsible investments, now is the right time! There are plenty of investment opportunities to choose from like mutual funds, ETFs and financial advisors who work with ESG (Environmental social governance) and/or SRI (Socially responsible investments) standards.
One problem with mutual funds and also investing with a financial advisor is that they try to balance performance and risk with diversification. Diversification dilutes your values and the performance is fairly flat. I tested this by opening an account with an ESG investor and a separate personal account on Motif with the same amount of funds. I tailored my personal investments according to my values. I made up all the losses from my advising account with the good gains in my personal account. My research was not based on the companies’ performance but purely based on whether they fit into my goal to divest from fossil fuel investments.
On Motif platform, you trade motifs which are groups of up to 30 investments each. I like the motif because you can save on transaction fees and invest without diluting your values by building your own mutual funds. I built two motifs based on Green Century’s guide and Clean200‘ list. You can divest from fossil fuels with these two motifs: motif1 and motif2. With these motifs, I am following my intuition that my investments will be more resilient if they don’t depend on fossil fuels, the price of which is prone to fluctuations.
Any sort of investment has its own set of risks but if you are going invest anyway, why not invest with your values?