What characterizes ethical investing?

Ethical investing is characterized by choosing investments that align with an individual's personal values and social responsibility. This approach emphasizes the importance of making investment decisions that not only consider the potential for financial returns but also the impact those investments have on society and the environment. Investors who engage in ethical investing often prioritize companies that promote sustainability, social justice, and ethical governance practices.

This contrasts with other approaches to investing that focus primarily on financial metrics or past performance. For example, maximizing profits at any cost solely prioritizes financial gain without regard for ethical implications. Selecting investments based solely on historical performance ignores other critical factors, such as current social issues or companies' impact on the environment. Finally, while financial analysis and projections are important for understanding a company's market position, they do not encompass the ethical considerations that are central to ethical investing. Thus, the focus on aligning investments with personal values and social responsibility is what distinctly defines ethical investing.