Often, investing is seen as a purely profit-driven activity separate from social concerns handled by charities or government programs. But there is a long tradition of using investing funds in attempts to change society for what the investor sees as the better.
Investing criteria that seek to screen out companies that support war, don’t focus on diversity or that are egregious polluters – or any number of other factors – are known as environmental, social and governance, or ESG, criteria.
The flip side of the cause-conscious investing coin is called impact investing, which is directing funds toward what an investor sees as a particular social good or positive outcome while also making money. A common industry slogan is that impact investing means “doing good while doing well.”
This post originally appeared at U.S. News & World Report.