What does "ethical investing" emphasize?

Ethical investing emphasizes making investment choices based on personal values and beliefs, which often involve considering the social, environmental, and governance practices of the companies in which one invests. This approach encourages investors to support businesses that align with their ethical standards, such as those focused on sustainable practices, social responsibility, or community engagement.

Investors who engage in ethical investing are not solely driven by financial returns; instead, they seek to make a positive impact in areas that matter to them personally. This can include avoiding companies involved in harmful practices, like those that contribute to environmental degradation or violate human rights.

In contrast, other approaches may focus exclusively on financial gain or risk minimization without regard for ethical considerations. For example, maximizing returns without regard for regulations or ethical implications runs counter to the principles of ethical investing. Additionally, the inherent avoidance of risk is not a primary concern for ethical investors, who often accept a certain level of risk in order to align their portfolios with their beliefs. Investing exclusively in government bonds does not fit the broader definition of ethical investing since it limits the types of companies and sectors that can be supported.