Investing in a Just and Sustainable Future

Simple steps to move your money in responsible investments.
There are nine blocks with symbols of giving, justice, caring, and reduced CO2. At the top of the stack, there are the letters "E" and "S". A hand is placing a third block, "G" at the end.
Source: Photographer

Whether you call it “impact investing,” “socially responsible investing (SRI),” or the more recent term-of-art, “ESG investing” (with “ESG” referring to socially responsible impacts related to a company's environmental, social, and governance policies), investing in positive returns for people and the planet is a topic familiar to many Green Americans.

Responsible investing has been used to pursue positive outcomes for society since at least the 1960s, when conscious investors sought to influence companies in favor of emerging movements for civil rights and women’s equality and against the Vietnam War. The first shareholder resolution focused on social issues came in 1970, when Ralph Nader’s Project on Corporate Responsibility purchased enough shares of General Motors stock to file a resolution calling for a corporate responsibility report.

Other early SRI campaigns included withholding investments from companies making harmful products, such as firearms, tobacco, and weapons of war, as well as the well-known—and successful!—campaign to divest from companies supporting the apartheid government in South Africa.

As the power of responsible investing has grown, its strategies have become more accepted in the mainstream, and investors have extended the scope of their ambitions (such as pushing companies to pursue workplace diversity and mitigate the climate crisis). As a result, the “ESG” movement has experienced a backlash.

A 2023 Congressional resolution—supported by 50 senators and 216 House members, but vetoed by President Biden—would have prevented pension-fund managers from considering critical factors such as companies’ effects on the climate crisis, worker safety, and other environmental and social issues in their investment decisions. At the state level, legislatures in Oklahoma, Tennessee, and Texas succeeded in enacting their own anti-ESG bills, with other states—including Iowa, Kansas, Michigan, Minnesota, Nebraska, Ohio, and South Carolina—pursing similar bills in 2024.

The good news is that a broad coalition of investors and activists—including Green America—are pushing back to protect everyone's freedom to invest as they see fit. As an individual interested in responsible finance, you still have many options for how to use your banking and investing dollars for good.

Among the strategies Green America recommends are to:

Move your money to a better bank: your checking and savings accounts (and even your credit cards!) can be tools for positive progress.

Screen your investments and divest from unsustainable industries: Add positive industries like renewable energy to your portfolio, and remove sectors like the weapons and fossil-fuel industries. A socially responsible financial planner can help. Divestment is a powerful and growing responsible-finance tool, with institutional investors committing to divest more than $40 trillion from fossils fuels as of December 2023.

Invest in communities: Find inspiration on how you can invest in people and the planet (for as little as $20!) at the local level. Investment options include CDs, money-market funds, community investing loan funds, and community development venture capital funds.

Vote your proxies: If you own stock directly in publicly traded companies, you have a say in how they are run. Use your proxy ballots to vote on issues you care about at companies in your portfolio to improve their ESG records.

Invest directly in responsible diverse businesses: Small businesses are a crucial and innovative part of our economy. You can help entrepreneurs underserved by conventional banks finance their businesses and achieve their responsible-business dreams.

Consider the impacts of your insurance policies: Insurance is the newest emerging responsible-finance arena. Individuals can push back on conventional insurance companies that are financing or underwriting the climate catastrophe and seek out companies that better match your values.

Inspire others! If you are already well into your responsible investing journey, please use the ideas and resources on these pages to get others involved in investing for a better future.

Whatever strategies you choose, your banking, investing, and other financial decisions will always affect the world around us—paying dividends for people and planet, as well as for your pocketbook. To ensure a positive return for communities, the environment, and a sustainable future, consider getting involved in one or more of these strategies today.

From Green American Magazine Issue