12 Ethical Investing Apps For A Socially Responsible ROI
When you funnel your money through ethical investing apps or socially responsible investment firms, it can do a lot more than just increase your ROI.
Speaking of, what’s the first thing that comes to mind when you think of investing?
You’d be forgiven for conjuring The Wolf of Wall Street, but we’d venture (capitalist) a guess that “ethics” probably isn’t it.
While the industry as a whole is light years away from adopting a true triple bottom line, some financial institutions, organizations, and start-ups are bucking the trend.
Like socially responsible banks, these apps for impact investing are a case in point.
They invest in companies that avoid or have minimal involvement in “sin sectors,” or stigmatized activities that include firearms, fossil fuels, tobacco, alcohol, and gambling.
But what is an example of ethical investing?
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The Best Social Investing Apps For Ethical Earning
With FLIT Invest it starts with Financial LITeracy and ends with real-time updates about the positive impacts of investment (CO2 emissions avoided, number of human lives improved, gallons of water supplied, etc.).
With more than $100 million in assets, EarthFolio investors support best-in-class conscious companies—and a lot of them.
Designed by women, Ellevest is one of the most popular investing apps for women, especially those who want to support women-led businesses.
Clear as your tax returns?
Don’t stress—if you’re still not sure what responsible investing means, jump down to the end of the article to find out why we should be investing ethically and how to be sure your money is going where you think it is.
The Best Ethical Investment Apps & Platforms
USA Socially Responsible Investing Platforms & Apps
AUS Socially Responsible Investment Platforms & Apps
UK Socially Conscious Investing Platforms & Apps
Socially Responsible Investing Apps in the USA
1. FLIT Invest
FLIT Invest’s Automated Impact Investing App
With a name inspired by “financial literacy,” it’s no wonder FLIT Invest is one of the best social investment apps.
Users can choose the industries they wish to avoid (i.e. fossil fuels and weapons), then choose the values they’re most passionate about (i.e. gender equality and climate solutions).
A personal portfolio based on six investment themes is generated based on a methodology aligned with the Global Impact Investing Network’s (GIIN) recommendations (read: no greenwashing).
The impact—financial and otherwise—can be tracked in real-time using a variety of different metrics. Users will see carbon exposure and intensity (exposure to high carbon industries and CO2 emissions), among other measures.
Get started with a minimum investment amount of just $10. There are no tiers or extra features for higher-valued portfolios, all in an effort to “democratize investing”.
About FLIT Invest
With a blended mission to help people achieve financial security and change the world, FLIT Invest’s automated impact investing app will help people put their money where their heart is.
Co-founder Alejandro Fritz recognizes the gap in young people’s knowledge surrounding financial education, which is why FLIT Invest keeps confusing jargon at a minimum and allows investors to make changes in the areas they care about most.
Their accounts are in the custody of SIPC-protected Apex Clearing Corporation and investors’ information and data are never rented, sold, or traded.
2. EarthFolio
EarthFolio’s Socially Responsible Investments
EarthFolio’s social investing app offers you two portfolios.
A Core Portfolio, which includes funds with high ESG ratings; and a Fossil Free Portfolio if you’re looking to fully divest from fossil fuels. These include a mix of ethical stock investing and ethical bond investing.
Either portfolio on the automated investing platform will mean investment in companies with “best-in-class” environmental, social, and corporate governance performance.
Several account types are offered: individual and joint accounts; traditional, Roth, and SEP IRAs; trusts; and 401K rollovers.
There is a minimum investment of $25,000 and an annual management fee of 0.50%, in addition to an expense ratio fee.
They do not offer tax-loss harvesting—offsetting of capital gains with capital losses resulting in little or no capital gains tax.
About EarthFolio
EarthFolio, the world’s first sustainable robo-advisor, now has more than $100 million in assets.
They’re the only ethical investment platform that invests exclusively in funds classified as Sustainable or Responsible.
For more than a decade, they’ve been a member of The Forum for Sustainable and Responsible Investments.
Their investments are held by Ameritrade, protected by SiPC, and managed by Blue Marble Investments, which specializes in funding ethical services that protect the environment and promote social progress.
3. Ellevest
Ellevest’s Social Investing App
Ellevest is one of the best impact investing apps built by women, for women.
An Ellevest membership includes online investing, on-demand learning, a debit account, and money and career coaching.
Their investment strategy of low-cost ETFs and/or mutual funds includes a mix of stock, bond, and alternative funds.
With an Ellevest Impact fund, up to 53% is invested in ESG and impact funds, with a variety of focus areas such as workplace diversity, human rights, and GHGs.
Membership plans for the Ellevest app cost as little as $5 a month, though IRA access is only for higher-paying members.
There is no minimum investment deposit or balance, but some portfolios have a minimum requirement ranging from $1-$240. For members with $1M or more, a Private Wealth Management account is available.
They don’t offer tax-loss harvesting, but do provide tax minimization strategies.
About Ellevest
Ellevest’s mission is to get more money into the hands of women, people of color, and members of the LGBTQIA+ community.
They make it easy for members to support women-led businesses through the Ellevest Women-Led Collection.
Viewing investment through a gender-conscious lens, Ellevest factors in the gender pay gap and lifespan estimates into portfolio projections.
Acknowledging the link between women’s equality and racial justice, their Intentional Impact portfolios now include ways of supporting BIPOC, helping you “invest in a better world for all women”.
Note that Ellevest primarily uses ETFs provided by Vanguard. Since they do not specify which, it’s hard to tell if there are any ties to those that fund big oil, of which Vanguard has several.
4. IMPACT
IMPACT Ethical Investing App
Designed exclusively for socially responsible investing, the IMPACT app makes it easy to find—and invest in—socially conscious companies that align with your values.
Choose between 13 different values that you find important or very important (i.e. land health, LGBTQ inclusion, and ocean life). Then, select the business practices you’d like to avoid, such as greenhouse emissions and animal testing.
IMPACT then creates a portfolio with US stocks and ETFs, which are charged at CAD 0.01 per share or USD 0.005 per share. There are no account minimum investment amounts or platform fees.
Even expensive stocks can be purchased via a fractional share (meaning investments as little as $1). IMPACT also provides an option for trading stock.
About IMPACT
IMPACT was designed and is managed by Interactive Brokers LLC, a Canada-based, highly-rated global brokerage firm that focuses on market access and low-cost investing.
For those new to investing, the app offers simulated trading before a full brokerage account is opened. It can also be used to purchase carbon offsets and make direct donations to charity.
With every $1,000 added to an IMPACT account, 25 trees are planted.
5. OpenInvest
OpenInvest’s Socially Responsible Investing
OpenInvest is building a green investing app that will allow financial advisors to create personalized value-driven ESG portfolios equipped with transparent reporting (think: exact number of trees planted, amount of carbon saved, etc.).
This sustainable investing solution uses values-based metrics backed by industry-leading data.
When you invest via OpenInvest you’re supporting the following causes: reducing greenhouse gas emissions, divesting from the Prison Industrial Complex, investing in women leaders, supporting LGBTQIA+ rights, divesting from fossil fuel producers, or investing in disability inclusion—to name a few.
The personalized investing experience will feature indexing, impact reporting, proxy voting, tax optimization, and more.
About OpenInvest
OpenInvest is a Public Benefit Corporation and asset manager that provides tech-driven, customized ethical investing.
OpenInvest was acquired by J.P. Morgan in 2021. Unfortunately, this company has quite the “rap sheet” and could easily feature as the poster child for capitalism in practice.
OpenInvest shouldn’t be punished for the sins of its father, but we would suggest keeping an eye on those transparency claims.
6. Betterment
Betterment Socially Responsible Investing
If you’re looking to specifically invest in climate impact or social impact, or want to know how to invest in carbon credits or a broad impact, Betterment is one of the green investment apps to look into.
Their Socially Responsible Investing Portfolios make it easy to support socially conscious companies that share your values—from promoting gender diversity to funding green projects.
These portfolios are custom-built with low-cost, diversified EFTs that support Climate Impact, Social Impact, or Broad Impact (both).
They offer automated investing, IRAs and 401(K), trusts, checking accounts, and retirement planning services. Investing accounts can be linked with other accounts to enable better goal setting.
A minimum investment amount of just $10 is required for the Digital plan, and Betterment charges a relatively low annual management fee: 0.25% of assets under management or $4 per month (based on investment amounts and deposits).
The Premium plan requires a minimum investment amount of $100,000, charges 0.40% annually, and gives you unlimited access to certified financial planners for investing advice (also available for a fee).
Free tax-loss harvesting is available.
About Betterment
Betterment is an independently owned smart money manager and the largest independent online financial advisor.
While technically a robo-advisor, Betterment is equipped with a team of economists, PhDs, and industry experts. They clearly share their methodology for their SRI-focused funds, which includes values-based metrics like toxic emissions & waste; biodiversity & land use; supply chain labor standards; and tax transparency.
Betterment is an SEC-registered fiduciary, meaning they’re required to act in investors’ best interests, provided the SEC upholds these laws.
However, like many other non-ethical investment platforms, Betterment’s Broad Impact portfolio primarily utilizes the ESGU (the largest ETF in the sphere)—of which ExxonMobil, Chevron, and Hess hold large shares.
The three of the four ETFs in their Climate Impact portfolio (SPYX, EFAX, and EEMX) also have ties with companies that hold fossil fuel reserves.
This all means that those “ethical” funds may still be indirectly funding things like oil and gas, deforestation, and prisons.
If comparing Ellevest vs Betterment, Ellevest may not be totally transparent about their ETFs, but Betterment’s exposes some major greenwashing.
7. Personal Capital
Personal Capital’s Socially Responsible Portfolios
Personal Capital offers a Socially Responsible Investment (SRI) strategy to prioritize companies managing ESG.
Using a blend of inclusive and exclusive filters, they create portfolios that avoid companies engaged in controversial categories (i.e. fossil fuel energy sector, adult entertainment, small arms), while supporting those proactively managing issues like green energy, conflict minerals, and executive compensation.
By using individual SRI company stocks (based in the U.S.), they offer better tax efficiency and customization options than off-the-shelf EFTs and mutual funds.
They’re also best-in-class concerning the management of carbon intensity, GHG reduction, diversity programs, bribery & corruption programs, whistleblower programs, and other social and environmental metrics.
However, portfolios that incorporate individual U.S. stocks are reserved for investments of $200,000 or greater. Wealth management fees are 0.89% up to the first $1 million (decreasing after that). These offer tax-loss harvesting.
There is a lower-investment, all-ETF socially responsible portfolio available, but the information is only available by speaking with an advisor.
Personal Capital’s other investment offerings (like 401Ks) aren’t ethically aligned.
About Personal Capital
With more than $20.5 billion in assets under management, Personal Capital is a go-to for many Americans wanting budgeting, investing, and net-worth tracking.
The FDIC-insured company is taking steps towards a more diverse and inclusive future and provides their employees with equitable benefits like LGBTQ-inclusive healthcare benefits, paternity and maternity benefits, and paid volunteer hours.
Impact Investing Firms In The UK
8. CIRCA 5000
CIRCA5000 Impact Investing App
As one of the best impact investing apps available online for UK investors, CIRCA5000’s portfolios prioritize impact and return, while minimizing risk.
The portfolios are structured around two core themes: Planet and People. Investors can choose one, or a blend of both. And opt for one of three risk tolerance levels—cautious, balanced, and adventurous.
Investors can also access general investment accounts (GIA), individual savings accounts (ISA), junior individual savings accounts (JISA), and personal pensions, while exchange-traded funds are soon to be available.
Management fees for ISAs, GIAs, and JISAs are £1 a month, with an annual 0.45% monthly platform fee. They’re also the place to turn to for pensions with a zero management fee.
Stay tuned, as CIRCA5000 plans to expand outside of the UK.
About CIRCA5000
Formerly tickr, CIRCA5000 is “the investment platform of the human future”.
They invest in things with universal appeal: water; food; energy; health; cybersecurity; and education.
The FCA-Authorized, Certified B Corp invests wealth only into responsible businesses that are thematically and objectively aligned to at least one Sustainable Development Goal (SDG) and can prove how they deliver results.
CIRCA500 itself is behind a range of community services and positive environmental impacts.
To support financial inclusion, they have an e-learning platform to support people on their investing journey and hold events to address investing imbalances for BIPOC, non-binary folks, and women.
A partnership with Net Purpose provides third-party data as a means of scrutinizing the company’s claims, so CIRCA5000 can keep an eye out for greenwashing.
Through a partnership with BeZero, they offset 10x their carbon emissions.
9. Wealthify
Wealthify’s Green Investing Platform
Wealthify’s app is centered around five ethical plans that support organizations committed to positive environmental and social impacts.
The plans aim to exclude “sin sectors’ (weapons, tobacco, gambling, and adult entertainment) as well as genetic engineering, intensive farming, deforestation, oppressive regimes, unfair labor practices, excessive political donations, and human rights issues.
They blend actively managed mutual funds and ETFs, providing a balance of shares, bonds, and some thematic investments.
Individual and junior savings accounts, general investments, and personal pensions are available across five risk tolerance levels: cautious, tentative, confident, ambitious, and adventurous.
You can kick-start your investment account with £1. There is an annual 0.6% fee in addition to the 0.7% investment fee.
About Wealthify
Wealthify is one of the independent robo-sustainable investment platforms that specialize in low-fee ETFs that are regularly monitored for ethics.
They aim to break down barriers and eliminate investing jargon to make investing more accessible.
All fund providers are signatories of the Principles of Responsible Investing (PRI), the world’s leading authority on responsible investing.
However, they may still receive up to 10% of their overall profits from excluded harmful activities.
10. Nutmeg
Nutmeg’s Ethical Investment App UK
When it comes to social investing apps in the UK, there are few more popular than Nutmeg. They were the first and now are the largest responsible investing firm.
Their globally diversified Socially Responsible Investment (SRI) portfolios avoid ETFs associated with controversial industries and instead prioritize leaders working towards positive social and environmental impact.
Members can see how their portfolio performs against various metrics including carbon emissions, pollution and waste, labor management, controversial sourcing, business ethics, and tax transparency.
Individual and junior savings accounts, stocks, shares, pensions, and general investments are available across ten risk levels.
The minimum investment amount for lifetime ISAs is £100 or £500 for other types of investments. For socially responsible investing, the annual fees are 0.75% up to £100K, and 0.35% for investment beyond that amount.
About Nutmeg
Nutmeg provides investors with a cheaper alternative to typical wealth management platforms.
Established over a decade ago, they’re one of the most well-established robo-advice brands. Assets are protected by being held with Barclays and State Street.
For their SRI portfolios, they work alongside research firm MSCI, which assesses ESG, climate products, and performance. All Nutmeg portfolios (not just SRI portfolios) are assessed against ESG factors.
In 2021, Nutmeg was acquired by J.P. Morgan.
Socially Responsible Investing Apps in AUS
11. Douugh
Douugh Ethical Investing App Australia
If you’re a beginner investor in the US or Australia, Douugh is an ethical investment app making investing as easy as one.two.three.
Users can create curated investment portfolios using specific ESG criteria, such as renewable energy and electric vehicles, or look at how each investment performs—reported as a Goodness Score.
They can also see an overall Goodness Score across all holding, including those in some of the world’s biggest companies (i.e. Spotify, Doordash, Zoom, Apple).
A full list of 4,500+ (mostly) ethical investing stocks and shares is available.
There are no brokerage or transaction fees and all investments are insured for up to $500,000 under the SIPC scheme. The minimum amount you can fund is $100 AUD.
About Douugh
Australian ethical investment app Douugh is a Certified B Corp that wants to make value-driven investment easy.
Investments are insured under the Securities Investor Protection Corporation (SIPC) scheme.
While Douugh doesn’t offer any investing advice, the founder launched Ethic Adviser, an ESG research-based tool for those wondering how to build an ethical investment portfolio.
Douugh avoids companies “directly involved” in fossil fuels, tobacco, fur, or military and weapons production, but as we’ve seen, this doesn’t mean your money won’t indirectly fund sin sectors.
Look out for those like Lockheed Martin Corporation (an arms company), British American Tobacco p.l.c., and Laredo Petroleum Inc. (a hydrocarbon exploration company, as well as recognizable unethical giants like Walmart and Amazon.
12. Australian Ethical
Australian Ethical: One of Australia’s Top Clean Energy Investing Apps
As Australia’s largest and first 100% ethical investment manager, Australian Ethical has more than $6.18 billion in SRI-focused funds.
Ethical investing is the only thing they offer, and they do so through managed funds, ETFs, pensions, and 7 options of super funds focused on the health, technology, and clean energy sectors.
They have 200+ revenue thresholds for investment exclusion, such as finance for fossil fuels, non-sustainable food systems, human rights abuses, and old growth logging.
Investments with Australian Ethical have 1.8x the revenue dedicated to sustainable impact solutions, compared with the benchmark.
For clean energy, Australian Ethical shares have 5.6x more investment in renewables!
Retail class investors have a minimum investment amount of $1000 ($500 with a regular investment plan) and pay 0.20%-1.69% in management fees. Investors in the wholesale class have a minimum investment amount of $25,000 and are charged a management fee of 0.59%-1.20%.
About Australian Ethical
Certified B Corp Australian Ethical makes a direct, on-the-ground difference for Australians—even those who don’t invest with them.
The green investment app supports a net-zero future with investments that have a carbon intensity (tonnes of CO2e per $ revenue) that’s 77% less than the benchmark.
Through the Australian Ethical Foundation, 10% of their post-tax profits fund charities and solutions addressing climate change.
More than $8 million has been donated through public and by-invitation grants.
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What Is Ethical Investing?
What is ethical investing exactly?
According to the Cambridge Dictionary, ethical investment is “the practice of investing in companies whose business is not considered harmful to society or the environment”.
Pro-social or environmental investing works by either including positive-impact investments, avoiding negative-impact investments, or ideally doing both.
ESG Investing
Ethical investing is used interchangeably with another term: ESG investing, which assesses a company’s operations based on environmental, social, and governance criteria.
However, there’s no standardized definition for ESG and ethical investing apps have unfortunately been associated with subsequent greenwashing and “woke-washing.”
Investors may experience higher fees on ESG products, hard-to-trace investments, and bogus sustainability claims.
It’s no wonder the former chief investment officer for sustainable investing at BlackRock (Tariq Fancy), warned that sustainable investing is often nothing more than a “placebo.”
ETFs
ETF’s (exchange-traded funds) are curated collections of securities, or financial assets that can be bought, sold, and traded.
They can contain several different types of investments, including commodities, stocks, bonds, or a mixture of investment types. A single ETF can own hundreds—or thousands—of stocks across various industries or could be concentrated in just a single sector.
EFTs are traded like stocks, and as such, the price of shares will fluctuate throughout the trading day (unlike mutual funds, which only trade once after the markets close).
Robo Advisory
Many green investing apps are considered to be “robo-advisors,” an investment management system that relies on AI instead of human financial advisors.
The process begins with you, the interested investor filling out a quick survey or questionnaire on things like desired growth and risk. Then the impact app suggests services that will help you achieve your financial goals.
Unlike traditional portfolios, robo-advisors generally keep costs down and have low or no account minimum requirements.
They also make the process less intimidating, making it more accessible for those who don’t have access to financial advisors or the time to learn the ins and outs of investing.
Tax-loss Harvesting
Many of these impact investing apps mentioned “tax-loss harvesting”—but what exactly is that?
While it’s not related to ethical investing per se, it is an appealing option if you have investments subject to capital gains tax.
The process involves selling an investment that has lost value and replacing it with a similar investment. The loss on the first investment can offset the gains made from the new investment.
Essentially, it minimizes the taxes that arise from capital gains, thus helping you keep more of your money.
Thanks to robo-advisories, many ethical investment apps offer free, automatic tax-loss harvesting.
Why Build A Responsible Investment Portfolio
What’s the best long-term investment strategy?
Put money in a fund and forget about it.
But since your investment is doing more than paying a dividend, you should consider where you’re investing before logging off for the next 10 years.
As You Sow has several online tools to help you find out exactly what your retirement and mutual funds are investing in—but you may not like what you find.
Traditional investment has financially backed so many of society’s ills: oil, weapons, unethical working conditions, animal testing, nuclear power, gender inequality, climate change, etc.
Ethical investing apps can help you divest from these “sin industries,” and instead support organizations that are making our world a better place.
Thanks to an increase in ethical investment options, your money can not only work for you, but also for good.
According to The Guardian, the average annual return for a sustainable fund has been 6.9% a year, while traditionally invested funds average around 6.3% a year.
As millennials—who now make up the largest share of US investors—continue to amass more of the global investment pie, it’s likely that environmentally and socially responsible investment apps will continue to grow in popularity and performance.
What To Look For In A Social Investing App
While the U.S. Securities and Exchange Commission (SEC) is working to define ESG, we should continue to be wary of where our money is going, especially since greenwashing is rife.
So if you’re wondering how to build an ethical investment portfolio the right way, consider the following:
Legitimacy:
Choosing a trustworthy investment platform is step one.
In the United States, FINRA allows you to search for an investment firm to confirm they’re licensed and check for any serious complaints or regulatory issues filed.
Alternatively, these third parties can also help you identify lemons:
- SEC: When a US investment-oriented firm registers with the Securities and Exchange Commission, they become legally entitled to sell securities.
- SIPC: SIPC is a non-profit corporation that protects investors and is based on the Securities Investor Protection Act.
- PRI: The Principles for Responsible Investment is the world’s leading proponent of responsible investment and a UN-supported network of investors.
- FCA: In the UK, the Financial Conduct Authority regulates financial services firms.
It’s also helpful to look for ethical investment platforms that are fiduciaries, as this legally requires them to act in the investor’s best interests.
Certifications:
Look for a socially responsible investment firm or app that is a public benefit corporation—a for-profit entity that has a legally-defined mission to create a positive impact on the environment or society at large.
Certified B Corp have taken it a step further by meeting rigorous social and environmental criteria. Many sustainable clothing brands, socially conscious investing firms, B Corp banks, and other businesses from a variety of sectors have achieved B-Corp status.
However, some recent accusations of B Corp greenwashing mean we should not implicitly trust the B-badge completely.
Customizations:
In addition to choosing an investment option that suits your budget and financial goals, some ethical investing platforms allow you to fine-tune your investments so that they better align with your values or level of risk (i.e. automated investing vs something more hands-on).
Transparency:
Many ethical funds aren’t as ethical as they appear to be.
Similarly, what is “ethical” is up to you, so be concrete on the values you’re looking for in an impact investing app and be sure to check the platform’s list of holdings to see if they fit the bill.
The best impact investing apps will provide a concrete breakdown of what positive impact your funds have (i.e. amount of CO2 offset, trees planted, and other measurable metrics of ethical practices).
ESG/Sustainability Scoring:
As with personal sustainability apps, there are several questions we can ask when looking for an ethical investment app:
- Does the app have a thoughtful process behind sustainability scoring using reasoned metrics?
- How thoroughly are the companies and funds they support vetted?
- Is there data demonstrating a commitment to affordable housing, gender equality, emissions reductions, and other social/sustainability metrics?
When an investment platform has a detailed process, or partners with third-party agencies to obtain additional data, it’s a good assurance that their ethical fund is legitimate.
Ethics:
Look for the fine print regarding ethical vs unethical funding.
Some funds make it clear that a percentage of your investment can still be invested in the “sin sector” while others only invest roughly half in ethical companies.
Investing platforms are far from perfect, but it’s a start. Progress over perfection, right?
Inclusivity and Accessibility:
Some funds are clearly more budget-inclusive than others. Not everyone has a spare $100,000 lying around.
It’s good to see that many have tried to make investing more approachable, not just by having a low minimum investment amount, but by eliminating jargon and making the application process far easier than it used to be.
Final Thoughts On Social Investing Apps & Platforms
So, can you ethically invest?
Absolutely! You can (and should), as more people are realizing. In 2022, the impact investing market hit $1 trillion. That’s a lot of money that can do a lot of good.
Besides, investing is a privilege—not everyone has the means to do so. So for those of us with extra cash (who don’t exclusively rely on ethical credit cards), let’s use our investments as a force for good.
And while ethical investment portfolios are rarely 100% ethical, they are getting better and the process of investing via impact investment apps means it is also becoming easier.
Progress over perfection…because let’s be honest, anything is better than the default ethics of Big Finance.
Do you have any friends or family with too much green in unsustainable sectors and sin industries?
Share this guide with them so they too can make their money support more than just a comfy retirement.
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