Ethical Investing 2025: Align Your Money With Your Values

Hello and welcome to IntelligentPod, the podcast where curiosity meets clarity. I’m your host, Sophie Lane, and I am so glad you’re joining me for another episode where we dive into the smartest, most meaningful ways to live—and thrive—in our fast-evolving world. Today’s topic is one I know so many of you have been asking about. It’s timely, it’s important, and honestly, it’s something we can all act on: Ethical Investing—Aligning Your Money with Your Morals in 2025. If you’ve ever wondered, “Am I supporting causes I believe in… or am I unintentionally funding things I’m against?” then you are in exactly the right place. We’ll break down what ethical investing really means, why it’s booming right now, and how you can make your money a true reflection of your values—without sacrificing your financial goals. Let’s start by laying out the basics. Ethical investing, sometimes called socially responsible investing—SRI for short—or ESG investing, which stands for Environmental, Social, and Governance, is all about making investment decisions that don’t just focus on financial returns, but also consider the impact those investments have on the world. This could mean supporting companies that prioritize renewable energy, fair labor practices, or strong corporate governance—or avoiding industries like tobacco, fossil fuels, or weapons manufacturing. And here’s why this matters more than ever in 2025. According to a recent survey by Morgan Stanley, over 80% of individual investors in the U.S. now say they’re interested in sustainable investing—up from just over 50% a decade ago. Even more striking: Generation Z and millennials are leading the charge, with nearly 95% expressing a preference for ethical investments. So, what’s driving this tidal wave of interest? Well, a few things. We’re living in an era of unprecedented transparency. With just a few taps, we can see how companies treat their workers, where they source materials, and how their operations impact the planet. Social media brings both scandals and success stories to light in real time. And, let’s be real, the climate crisis is no longer an abstract future—it’s our present. More and more people are asking: If I have a 401(k), an IRA, or even just a little extra in my savings account, am I making a difference… or just making money? That’s the core of ethical investing: aligning your financial decisions with your personal values. But, as with anything that sounds simple at first, the reality can get complicated. Let’s break it down from a few different perspectives. First, the psychological angle. Why do we care so much about where our money goes? Well, studies in behavioral finance show that people experience something called “values congruence”—that’s the positive emotional state we feel when our actions are in sync with our beliefs. In fact, according to a study published in the Journal of Behavioral and Experimental Finance, investors who feel their portfolios reflect their values report higher overall satisfaction, regardless of how their investments are performing. So, it’s not just about dollars and cents—it’s also about peace of mind. But that brings up another point: What about performance? Isn’t ethical investing just code for “lower returns”? This is where the scientific, or in this case, the financial data comes in. For years, the myth persisted that investing ethically meant sacrificing profits. But the numbers from the past several years tell a different story. A comprehensive meta-analysis from NYU’s Stern Center for Sustainable Business found that, on average, companies with strong ESG practices outperformed their less sustainable peers, both in terms of stock price and accounting measures. In fact, during periods of market volatility—think 2020, 2022—ESG funds often proved more resilient than the broader market. Now, let’s look at the cultural side. Around the world, ethical investing takes different forms. In Japan, there’s a surge in what’s called “impact investing,” where funds are specifically directed toward projects like affordable housing or clean water. In Scandinavia, pension funds have led divestment campaigns against fossil fuels. And in the U.S., shareholder activism—where investors push for change from inside companies—has become a powerful tool for social and environmental progress. I want to share a real-life story that really brings this home. Last year, I spoke with a listener—let’s call her Maria—who spent years working in healthcare. She realized her retirement savings were invested in companies that, ironically, were contributing to the opioid crisis she fought against every day at work. For her, making the switch to an ESG fund wasn’t just about numbers—it was about integrity. She told me, “I want my money to be fighting for the same things I am.” That’s a sentiment I hear all the time. And maybe you can relate. Maybe you’ve already started this journey, or maybe you’re just curious and a little overwhelmed by where to begin. So, let’s get practical. How can you start aligning your investments with your morals in 2025? First, get clear on your own values. Is climate change your top concern? Labor rights? Gender equality? There’s no one-size-fits-all approach. Make a list of your priorities—this will guide your choices. Next, do a little digging. Most employer-sponsored retirement plans now offer at least one ethical or ESG fund option. If you’re using a robo-advisor or an investing app, look for portfolios that are labeled “sustainable,” “socially responsible,” or “impact.” Many brokerages now offer ESG ratings, so you can check how individual companies or funds stack up. If you want to take it a step further, there are now tools—like As You Sow’s “Invest Your Values” platform—where you can literally plug in your mutual funds or ETFs and see how they score on everything from fossil fuels to gender diversity on boards. And don’t be afraid to ask questions. Financial advisors are increasingly trained in ESG, but not all are experts. If you work with a professional, tell them your priorities upfront and ask for options that match your values. One important tip: Watch out for greenwashing. That’s when companies or funds make themselves look more sustainable than they actually are. Look for third-party certifications, like B Corp status, or check if the fund is a member of the Principles for Responsible Investment. And always read the fine print—sometimes “sustainable” funds still have significant investments in industries you might want to avoid. Now, I know not everyone has a big portfolio or a lot of money to invest. But every dollar counts. Even small changes can add up—especially when we act collectively. Remember, the ethical investing movement has grown because of millions of individual decisions. And if you’re a consumer, your spending choices are a form of investment too. So, let’s recap. Ethical investing is about making your money work for both your financial goals and your values. It’s a movement that’s reshaping the investing landscape in 2025, fueled by greater transparency, social awareness, and the realization that our dollars have power. Whether you care most about the environment, social justice, or good governance, there are more tools and options than ever before to help you invest in line with your morals. My challenge to you this week: Take a look at one of your investment accounts, or even your bank, and ask yourself—does this reflect what I care about? If not, take one small step: research an ESG fund, talk to your advisor, or even just jot down your values as a first step. Remember, the most important investment you can make is in a future you believe in. Thank you for joining me on IntelligentPod today. If you enjoyed this episode, please leave a review wherever you listen—it helps more curious minds find us! For show notes, resources, and links to everything I mentioned today, visit intelligentpod.com. And I would absolutely love to hear your thoughts, stories, or questions—just email me at sophie@intelligentpod.com. Until next time, this is Sophie Lane, reminding you: Invest intelligently, live intentionally, and never underestimate the power of your choices. Have a wonderful day!