The CFA Institute, a nonprofit group for investment professionals, has a free online course that can help you sort through the many approaches to ESG investing.
Don’t Dither
With so many choices, investors need to know their top priority, and “doing good” isn’t specific enough. “What is it you feel strongly about?” said Usman Hayat of the CFA Institute.
You might decide your first goal is avoiding stocks that violate your religion or your social values. No alcohol or no gun stocks, for example. If you decide your top priority is making money, you may go for a more flexible approach.
Don’t Expect Perfection
Of a stock, a fund, or yourself.
No company does only good in the world. A solar company might not treat its workers well, for example. A gay-friendly company might be a big polluter. “Investors need to realize that there is no perfect solution out there,” Hayat said.
And while a sustainable investing strategy may make the world a better place, even the most virtuous investors inevitably make compromises.