This article is part three in a three-part series on ethical investing. If you haven’t already, check out part one, What Is Ethical Investing? and part two Types Of Ethical Investing.

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So you’ve discovered that you can actually make scrumptious financial returns by investing ethically.  But how do you actually get started..? We got you.

‍Step 1: Work out your investment goals

There’s two sets of goals to think about here, your ethical goals and your financial ones

For example, your goal might be to only invest in companies that are committed to net-zero emissions. 

Well, that would knock out Nestle, Ikea and Unilever from your potential investments.

Or your goal might be to ensure your money doesn’t go towards mining or deforestation companies.

Now that you’ve chosen your ethical goals, it’s time to think about your financial goals.

You might have a financial goal to earn market-level returns over a 10 year period.

Once you’ve defined your goals, it will help you narrow down where to invest.

Step 2: Find out where your money is already going

If you’re already investing, it’s time to give your current portfolio a Tinder-eseque stalk and see if your portfolio aligns with your newly-found investing goals. 

You’ll want to look at any direct investments you’ve made, as well as indirect investments. 

For example, an indirect investment of yours is your superannuation.

So you want to look into where your superannuation is being invested, and ask yourself if you’d prefer your retirement savings be invested in a way that aligns more with your ethical objectives.

There are super funds you can choose that are specifically focused on ethical investments.

Step 3: Finding the right investments

Once you've landed on your goals, your research will be centred on investing in companies or funds that actually align with your goals.

You can either invest directly into shares themselves, or alternatively you can choose to invest in Exchange Traded Funds (ETFs) that are created with ethical objectives.

ETFs bundle together a group of shares with a particular ‘theme’. They will provide you diversification with allmost zero effort, but you might be hard-pressed to find an ETF that matches your exact ethics goals. 

On the other hand, individual stocks make it easier to invest according to your specificvalues, but they take a lot more effort to manage - and a lot more research!

For example, if you’re looking to invest in sustainable companies, you’ll want to look out for their:

• ESG reporting
• Carbon emissions 
• Environmental conservation efforts.

This will give you an indication of how the fund/stock defines their ethical contribution.

‍Step 4: Don’t forget to be critical

Beware the catfish of investing, “greenwashing”. When you’re screening companies or funds to invest in, be critical of the language they’re using and the stats they’re presenting.

Greenwashing is when companies or funds hype up their ethical impact in a misleading way to boost their reputation.

Pay close attention to the benchmarks they use and how they measure their impact. Do they abide by ESG standards or have they created their own?

Once you’re happy with the stocks you’ve selected, that’s all the hard part done.

You can put your money into your chosen investment and put your feet up knowing your money’s doing good work in the world.