Ethical investing begins with clarity.
Use this worksheet to define what you will exclude, what you will actively support, and how strongly you expect measurable outcomes.
The process helps you build a portfolio that matches your values and your return objectives.
Part 1: The No Go Zone (negative screening)
Think of this as your engine's air filter. What are the pollutants you want to keep out of your orchard at all costs?
Rank each from 1 (do not care) to 5 (absolute dealbreaker).
[ ] The Vice Pack: Alcohol, tobacco, gambling, pornography
[ ] Defence and conflict: Weapons manufacturing, military contracting
[ ] The carbon trail: Coal, oil and gas extraction, high emission utilities
[ ] The ethics gap: Poor labour practices, child labour, human rights violations
[ ] Animal welfare: Animal testing, factory farming
How to use Part 1
- Be specific. Name sectors, activities or revenue thresholds that constitute a dealbreaker.
- Apply consistently. Use these screens across funds and holdings when rebalancing.
- Expect trade offs. Strict exclusion may reduce the investable universe and increase tracking error versus your benchmark.
Part 2: The Acceleration Zone (positive screening)
These are the high octane fuels. Which global solutions do you want your capital to fund?
Choose up to three themes that move the needle for you.
[ ] The energy shift. Renewable energy, smart grids, battery storage
[ ] Social inclusion. Gender diversity in leadership, affordable housing, microfinance
[ ] The circular economy. Sustainable packaging, waste to energy, water conservation
[ ] Healthcare innovation. Medical research, accessible medicine, biotechnology
[ ] Ethical technology. Data privacy, ethical artificial intelligence development, cybersecurity
How to use Part 2
- Prioritise themes that align with your values and where you can measure outcomes.
- Combine thematic exposure with broad ESG aware core holdings for diversification.
- Start small. Consider a five to ten per cent pilot allocation to test conviction and impact.
Part 3: The Impact Pressure Test
This part demands measurable output. Answer two questions to set your investment intensity.
The performance floor. Do you require market matching returns or will you accept lower returns for specific outcomes?
[ ] Match the market (Environmental Social Governance integration)
[ ] Impact first (Impact investing)
The shareholder voice. Do you want your fund manager to be activist and use voting and engagement to drive change?
[ ] Yes, I want an active voice
[ ] No, I prefer passive alignment
How to use Part 3
- Match the market. Seek funds that integrate Environmental Social Governance data while targeting comparable returns to your benchmark such as Standard and Poor s 500 (S&P 500).
- Impact first. Accept that some pure play projects may have different risk and liquidity profiles in exchange for measurable social or environmental outcomes.
- Activism. Activist stewardship can influence corporate behaviour but often requires active managers and may come with higher fees.
"You may face value conflicts. For example, favouring clean energy can expose you to mining supply chains with poor labour practices. Different investor types will resolve that tension differently. There is no perfect portfolio only the one that lets you sleep at night." Rebecca Ellis
Your next steps
- Take your Part 1 and Part 2 results to your broker or platform.
- Search for the ESG scorecard or sustainability filter on your top three funds or ETFs.
- Check the overlap: does your current flagship fund contain any of your dealbreakers? If yes, plan replacements or offsets.
- Run a small pilot allocation to one thematic area and review outcomes at 12 months.
Checklist before you commit capital
- Confirm fund holdings match marketing claims.
- Look for third party verification such as alignment with the Sustainable Finance Disclosure Regulation (SFDR) or commitments to the Science Based Targets initiative (SBTi).
- Require clear key performance indicators and regular reporting.
