Ethical investing

Ethical investing involves the selection of investment securities based on one’s ethical principles. This usually involves the exclusion of certain types of securities, such as those of issuers that are engaged in the following activities:

  • Coal and fossil fuel production
  • Firearms
  • Gambling
  • Liquor
  • Tobacco

Conversely (or in addition to the preceding restrictions), an investor may prefer to acquire the securities of issuers that have good records of environmental practices, or which treat their employees in a fair and equitable manner.

This approach to investing does not necessarily generate the highest return for an investor, especially since some of the excluded activities just noted tend to produce above-average profits.