Category: Sustainable Investing

Investing Through the Inferno

A midyear check-in light on the data, some charts and how it all feels.

There’s no way we’re already halfway through 2025—you’ll just have to bear with me as I run it back to April. You remember her, right? A time before it was 90 degrees everyday, before I thought I would burst into flames right on the concrete.

April was the beginning of my tour, Nick Cave in Boston, St. Vincent in New Haven, pour me another tequila soda. Then May in Texas for one suffocating minute, then the madhouse, then the grave. Just kidding—June was another story, but we did it to death, avoided the rain and the heat almost took us out completely. The Kills killed it three times until we prayed for mercy from the sun. No longer our god, we watched it sink behind the stage while the heat tore through Queens of the Stone Age’s set. We don’t even have to talk about how much my credit card statement was after all that, you get the idea!

Net worth & portfolio in the green

April was also when the tariffs brought everyone to me, asking what they should do with their investments. I told my friends, “Don’t look at your accounts,” and then opened every single one of mine to calculate my net worth as of the end of March. My strategy won’t be stopped by the nonsense! At the end of June, my Charles Schwab brokerage account is not only back to where it was before the announcement, but it has now surpassed that amount. I said, “Everything will be fine in, like, two months,” and thankfully, the numbers didn’t make a fool of me like they usually do!

Despite the ongoing destruction of the Earth and the people who live here, my net worth is increasing and my portfolio is profitable. I haven’t been checking my investments as often because I know it doesn’t matter what they look like now. All that matters is I’m keeping my money in the market so it will continue making me more money.

My portfolio of sustainable exchange-traded funds (ETFs) is performing well. When I checked their grades on As You Sow as of the end of June, almost all the ETFs had A’s and B’s. The Amplify Etho Climate Leadership U.S. ETF’s (ETHO) gender equality grade improved from F to B, removing it from the probation it was placed on after my last review. My Schwab U.S. REIT ETF (SCHH) maintains its gender equality grade of C—come on real estate sector, let’s get that up! One of my latest additions, the Stance Sustainable Beta ETF (CHGX), is now on probation with a gender equality grade of F. If the grade doesn’t improve by my next review in six months, the ETF will be removed from my portfolio. Since no changes are needed, my portfolio will remain untouched until then.

Finance charts? Sure, why not?

I have some new resources to share with you all, in the form of charts! I promise I’ll keep it light, but if you’re looking for a free website to track your investments and their performance, FinanceCharts.com is a helpful place for beginners to start. Here’s the Schwab U.S. REIT ETF’s price over the last year. I can see exactly when the beginning of April sent the holding downward, and I can see its steady climb back up to around where it was in March. I can also see that the ETF has some more recovery ahead if it wants to get up to its last high price from September 2024. The charts are interactive and you can select the time period you want to analyze. I don’t usually do much price analysis with my individual investments, but if I ever need more insight, FinanceCharts.com is waiting.

A line graph showing the price movement of the Schwab U.S. REIT ETF (SCHH) over one year, with data points indicating an upward trend and various fluctuations.

Source: FinanceCharts.com.

A few months ago, I read the book “Stikky Stock Charts” by Laurence Holt. For full disclosure, I was sent this book for free so I would review it. You can read my full review on Goodreads, but I found “Stikky Stock Charts” a helpful introduction to using charts. I was able to understand the purpose of them with very simple descriptions of different chart trends. The book itself is quite image-heavy, with a chart on almost every page. It covers significant historical events, like the meme-stock craze, and how certain stocks reacted at the time. This grounds investing in the real world, where it belongs. “Stikky Stock Charts” will be another resource to consult when I’m looking at a potential ETF for my portfolio.

Putting my investments on snooze

AAII taught me well, I can sleep at night. I don’t think about my money much anymore. Of course, I want to save more of it, but I also have to stay realistic. Everything keeps getting more expensive. My life is expanding, allowing more experiences in. This is the life I’ve been working toward, and I get to see the dividends—both literal and figurative—that are being paid out.

Here’s to your portfolio going up in the second half of 2025. I won’t wait this long to check in with you again, but I will wait for the temperature to fall a bit!

Learn more about my investing strategy:
New Year, New Investments, Same Strategy
PRISM Step 4: Selecting and Managing Your Investments
Midyear Portfolio Review and Finding an ESG Benchmark

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Investing in Sustainable Gender Equality in 2025

A new year, another portfolio rule and two new sustainable funds.

Welcome to 2025! Fun fact, 2025 is considered a “square” year since it is the square of 45 (45 × 45). I bet you never thought you’d get a math-related fact from me, let alone a fun one!

I saw a lot more green last year since my portfolio generally did well in 2024, but that was mostly due to only rarely checking my balance. The less I looked at my portfolio, the better it performed. After election results were announced, I peeked at my Charles Schwab brokerage account and saw I was profiting from the outcome. This unfortunate aspect of investing is always in the back of my mind as I reinforce why I maintain a sustainable approach instead of giving more money to large, harmful corporations.

As of December 27, 2024, only one of my holdings is in the red over the long term: the VanEck Biotech ETF (BBH), down 2.6% since being added to my portfolio in early 2023. My best performer is the Tortoise Global Water ESG ETF (TBLU), up 17.6%. This fund used to be the Ecofin Global Water ESG ETF (EBLU), but has since changed its name and ticker symbol. It was one of the first exchange-traded funds (ETFs) I bought back in March 2022 when I started this sustainable portfolio, making it my oldest current holding. Here’s a closer look at what it invests in:

Source: Tortoise Capital.

Unfortunately, the platform I use to grade my holdings on sustainability, As You Sow, gives Tortoise Global Water a D for fossil fuels and gender equality, disqualifying it from my portfolio. At least I’ll be selling this one on a gain!

The rest of my ETFs still have mostly A’s and B’s. The Schwab U.S. REIT ETF (SCHH) has a gender equality grade of C, which still qualifies for my portfolio. My latest addition, the Amplify Etho Climate Leadership U.S. ETF (ETHO), has performed well but grades D for gender equality. If this doesn’t improve by midyear, it will be my next deletion.

To avoid too much turnover, I’m adding a rule to my investing strategy. Since gender equality is the most difficult grade for sustainable funds to earn, instead of removing a holding when only its gender equality grade slips to D, there will now be a formal probationary period of six months for this grade to improve (accounting for the time between my reviews). The rest of the grades—fossil fuels, deforestation, civilian firearms, military weapons, the prison industrial complex and tobacco—should remain at A or B, with a drop to C qualifying them for deletion.

During my last portfolio review, I determined that I wanted to add another holding to the mix to bring my portfolio back to six ETFs for diversification purposes. On my search for a new ETF or two for my portfolio, I went with my tried and true process. I began on As You Sow, filtering first by a gender equality grade of C or higher, then adding grades of B or higher for the rest of the criteria.

A few funds focused on weight loss drugs caught my eye, specifically the Amplify Weight Loss Drug & Treatment ETF (THNR) and the Roundhill GLP-1 & Weight Loss ETF (OZEM). I know these drugs are poppin’ off, and I’m glad those who have struggled to lose weight finally have something that works. But I’m still not clear on their sustainability for the long term. I’m not a huge fan of pharmaceutical companies either, or the advantages they take with people’s lives. Both ETFs were recently incepted in May 2024, so they don’t have much performance data to analyze. They might be better candidates in the future!

Anine's sustainable portfolio changes: one deletion and two additions

Instead, I stumbled on two other ETFs that fit my strategy: the Vert Global Sustainable Real Estate ETF (VGSR) and the AXS Change Finance ESG ETF (CHGX). Vert Global Sustainable Real Estate has an expense ratio of 0.45%, below my threshold of 0.60%. Though it has an expense ratio grade of C compared to its peers, I have noticed this with many of my past holdings. Ultimately, the expense ratio itself is more important. Sustainable funds are going to cost a little more than their peers, that’s part of the deal! AXS Change Finance also has a grade of C for a slightly higher expense ratio of 0.49%. Vert Global Sustainable Real Estate has favorable recent and long-term performance, while AXS Change Finance’s performance grades aren’t as hot compared to its large blend category.

On the sustainability side, Vert Global Sustainable Real Estate has all A grades on As You Sow save for its gender equality grade of B—I’ll take it! AXS Change Finance has a mix of A’s and B’s, with a C for gender equality. I’ll be keeping an eye on that one, but I’m thrilled that I was able to find these funds for my portfolio. The process has become less grueling over the years, partly because I have figured out what to look for, but also due to sustainability becoming more embedded in the finance industry.

Next time, I plan to update you on my retirement accounts (yes, plural!) and net worth. More good news to come!

Wishing you all a prosperous 2025!

Explore this topic:
A Look at Top Gender Equality Funds
I read this so you don’t have to! Financial Feminist by Tori Dunlap
A (Very) Brief History of Women in Finance

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Digging for VanEck Sustainable ETFs

As I gear up for my next portfolio review at the end of June, I poked around As You Sow’s website to determine if there were any new candidates for my sustainable investing strategy. I began by looking for any mutual funds or exchange-traded funds (ETFs) with fossil fuels grades of A or B. This produced a list almost exclusively of mutual funds, which I am not currently investing in. I started considering a few of them, until I saw their expense ratios. My cutoff for expense ratios is 0.60%, and many of these funds were above 1.00% or even 3.00%—anything this high is the same as throwing my investment dollars into a pit and lighting them on fire!

Not to be defeated by how difficult it has been to find investments that are actually sustainable, I looked at my Charles Schwab brokerage account to see how my current ETF holdings were performing. One of my ETFs in the green, but not the best performer right now, is the VanEck Biotech ETF (BBH). It has all A grades on As You Sow—making its positive performance even better knowing that by investing in this group of companies, I am not killing the earth! This got me thinking that VanEck might have some other good candidates for my portfolio.

At the VanEck fund family page on As You Sow, it displays all funds that are gradable in its database. Since I’m searching based on a high fossil fuels grade, I can see that grade in the last column on the list of funds and narrow my choices based on it.

The VanEck Semiconductor ETF (SMH) has all A grades except for gender equality, which is D. No surprises here, the technology industry has a long way to go before it is equal for women and all genders, but I’m looking for a gender equality grade of C or higher for my portfolio. The VanEck BDC Income ETF (BIZD) looked promising with all A’s but an N/A for gender equality since there wasn’t enough data for a grade. Technically this fits my strategy, so I went over to AAII.com to determine if it was a good fit based on performance and expense ratio in the ETF Evaluator. Though its performance has been steady, its expense ratio is an alarming 11.17%! That performance is certainly not worth 11% of my portfolio’s value, so this ETF is off the list.

I scrolled further until I found the VanEck Environmental Services ETF (EVX), with a fossil fuels grade of B. The rest of its grades are A except for—you guessed it—gender equality at C. This fits my strategy, so let’s all cross our fingers and hope the expense ratio won’t eat into all this investment’s potential …

This expense ratio of 0.55% comes in just below my cutoff of 0.60%! VanEck Environmental Services has earned a potential spot in my portfolio, as it also has average performance over the long term (grades of C) and an A grade for the most recent quarter.

I will perform a similar search to see if I can find anything better when it’s time for my portfolio review. I have a little more peace of mind knowing that there are some hidden gems that will fit my strategy—I just have to do more digging!

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Preparing for a No-Buy Year

The January algorithms got me: I have watched so many videos about people planning for a no-buy or low-buy year in 2024. This entails only buying what you absolutely need and keeping any excess to a minimum. Grace Nevitt on YouTube suggests making green light, yellow light and red light lists to divide up what you are required to buy in order to survive, what you are allowed to buy and what you shouldn’t be buying and/or buying more of.

Given the green light are things like bills, groceries, hygiene and cleaning products, along with whatever needs to be replaced. The yellow light list is for going out to dinner with friends, checking out museums and engaging in other forms of amusement that are more experiences than material things. The red light list consists of what you will not be buying this year. For me, this means I’m enforcing a one-in-one-out policy on books and records, and I don’t want to buy any subscriptions this year. It’s definitely time for me to get a library card! The whole process of making these lists is meant to give you pause before choosing to purchase something and bring it into your home where it will eventually just take up space unless you give it purpose.

I also watched some videos on Swedish death cleaning, but I’ll leave death out of it for now!

As someone who enjoys physical media, I grew up wanting to hang onto every good book I had ever read and have all my favorite albums on vinyl. But as I get older and schlep my entire life from place to place every few years, I want my material things to be imbued with more intention. I don’t need to have every record by Ty Segall on vinyl—the man is beyond prolific and shows no signs of stopping! Instead, I can just have my favorites on hand that bring me the most joy. In the past I was quite the voracious reader, consuming more than 50 books per year. But in recent years I have slowed down to less than half that, and I recently discovered that I have the same number of books left to read on my shelves as I read in 2023—I truly don’t need any more books this year!

Upon declaring that I was in a no-buy year, I promptly fixed a four-year dilemma and bought myself a new desk. Technically, I have never had a proper desk since I moved out on my own. I had a vanity that eventually became my desk when I started working from home during the pandemic. Bless my dad for helping me put it together—because it was stressful for everyone involved—but the single drawer has never pulled out easily, and the top has always been such a diva to clean. I’m willing to finally part with it to have something functional with proper storage for an adult’s number of papers and problems!

While working on my green light list, I noted other things that I need to replace this year. I could really use a new kitchen pot and pan, but I have something in mind that will do the job of both those vessels and more. Another idea I picked up from these videos is to choose the option that brings the most value into your home. If there’s a gadget that can do more than the object it’s replacing, it will add more functionality and take up less space. I love organizing and decluttering, so this is my bread and butter. One day I will reach the final-boss level of efficiency, and I’ll spend my entire life getting there if I have to!

Overall, buying less in 2024 means that I will have more money to gain momentum on all my goals. Instead of causing dread, enforcing a no-buy year makes me excited to see what my money will do this year. Buying less is also better for the environment, so this ties into my sustainable investing strategy. Instead of having three or four backup toothpastes, I only want to buy toothpaste when I’m close to running out of it to avoid hoarding. I also don’t want to spend more time thinking about what I don’t have, feeding into a scarcity mindset. Focusing on using what I already have and still buying myself a little treat here and there is the goal. I’m choosing to limit any large/replacement purchases to once per quarter. My new desk was my first-quarter qualifier, and the amount of happiness it has already brought me solidifies that I made the right choice.

Do you think you would be able to do a no-buy year? What would be on your red light list? Let me know in the comments below!

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A Look at Top Gender Equality Funds

I haven’t been thinking much about my investments recently. To be frank, there is a lot going on that demands my attention and my portfolio isn’t at the forefront of what I care about right now. I check my Charles Schwab brokerage account very infrequently, to the point that I have seen some green where there used to be red. This behavioral technique of looking at my account less has given me an illusion (or delusion?) of hope.

However, it has been a minute since I checked in with the sustainable investing world. My sustainable investing strategy requires a review twice a year, so I will be analyzing my portfolio at the start of the new year. One of my rules is anything I choose to invest in should have an As You Sow gender equality grade of C or better, since many of the promising candidates that I found in the past are lagging in that area. Only two of the five index exchange-traded funds (ETFs) in my portfolio have A grades for gender equality. So, I went to As You Sow to find the top gender equality funds with grades of A to see how they compare and if they’re suitable investments.

The top four funds on the list as of November 12, 2023, were the Impax Ellevate Global Women’s Leadership Investor fund (PXWEX), the Boston Trust Walden Balanced fund (WSBFX), the Green Century Balanced fund (GCBLX) and the Amana Income Investor fund (AMANX). All four have grades of A for gender equality and civilian firearms, meaning stocks held within the funds do not support the production of civilian firearms with their investments. The gender equality score looks at gender balance in the leadership and workforce of a company and equal pay for employees.

Here’s a breakdown of the gender equality score for Impax Ellevate Global Women’s Leadership:

The further score criteria analyze the holdings of the fund based on how safe a company is for workers, whether there is sexual harassment in any form, how the rights of employees are protected, if business practices are both ethical and compliant and how diverse the company’s suppliers are, including women-owned businesses. Gender equality isn’t just about women, it encompasses the well-being of all genders.

When it comes to the other As You Sow grades, these funds vary widely. Many have high grades for tobacco but are inconsistent on the prison industrial complex. Deforestation and fossil fuels aren’t as big of a concern for some of these funds either. Amana Income Investor has a military weapons grade of F, while the rest of its grades are A and B.

Every time I look at these As You Sow grades, I am reminded of the meaning of intersectionality, something I mentioned in a previous blog post about why I care about sustainable investing. Intersectionality is the acknowledgement that everyone has their own unique experiences of discrimination and oppression, considering gender, race, class, sexual orientation, physical ability, etc.

Though these funds are focused on investing in companies that are promoting gender equality, some seem to be literally missing the forest for the trees, with deforestation and fossil fuel grades of C and D. Just because a company is doing its part to change in one area of environmental, social and governance (ESG) doesn’t mean it will do so across the board. The impact of deforestation and fossil fuels on the earth is one of the largest contributing factors to climate change. In turn, the people who bear the brunt of climate change are those who don’t have access to resources needed to survive due to gender and class inequality, racial oppression, lack of physical ability and homophobia. Everything is connected, and we are all individually impacted by the world in our own unique ways.

Now let’s look at these funds using AAII’s Fund Compare tool. Something interesting I noticed right off the bat is that most of these funds were incepted in the late 1980s or 1990s. Most of the funds that fit my investing strategy are much newer funds on the market, so they don’t have as much return history to look at. The two funds with better return grades are also less risky compared to their category: Amana Income Investor and Boston Trust Walden, with category risk indexes of 0.89 and 0.90, respectively. Green Century Balanced and Impax Ellevate Global Women’s Leadership have poor return grades and are riskier investments compared to their category. This usually isn’t the case with investing: If you take more risk, you are usually rewarded with higher returns.

Unfortunately, none of these funds fit my current investing strategy. All four have expense ratios of 0.77% or higher, while my cutoff is 0.60%. When it comes to As You Sow grades, the only fund that comes close is Green Century Balanced, with just a military weapons grade of C dragging it down. I have said previously that gender equality will be the hardest category for funds to grade well in. It is the longest-standing, most deeply ingrained issue in our society, and will therefore be the hardest to counteract and eventually dismantle through investing. The rest of the grades for fossil fuels, deforestation, civilian firearms, the prison industrial complex, military weapons and tobacco are all for man-made, more tangible things that are somewhat easier to pinpoint and avoid. The act of isolating gender equality as an issue on As You Sow instead showed just how connected every aspect of sustainability is and, to me, makes sustainable investing all the more important.

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Midyear Portfolio Review and Finding an ESG Benchmark

We made it to the second half of the year already, which means it’s time for a midyear portfolio review! Let’s analyze my seven exchange-traded fund (ETF) holdings and determine if any of them will get the guillotine.

My review process involves looking at my portfolio holdings’ performance, expense ratios (how much investing in the ETF will cost me per year) and their As You Sow grades on fossil fuels, deforestation, gender equality, sales of guns and military weapons, the prison industrial complex and tobacco. I have potentially four holdings that could be deleted, but will I be replacing all of them?

All of my holdings are looking good on expense ratios and their grades; they’re all below 0.60% and have grades of A or B. However, three of my ETFs are having “Gender Trouble” (Judith Butler, 1990) with gender equality grades of F. One ETF’s fossil fuels grade slipped to C. These grade changes are all grounds for deletion in my investing strategy. When evaluating my ETFs on their performance, the four with unsatisfactory As You Sow grades were also the worst performers since being added to my portfolio:

I had a lot of trouble finding replacements for these ETFs that fit my stringent criteria for addition. Possibilities included the Fidelity MSCI Information Technology Index ETF (FTEC), with a prison industrial complex grade of C dragging it down, and the Nuveen Winslow Large-Cap Growth ESG ETF (NWLG), with all A’s and B’s on As You Sow but an expense ratio of 0.64% (grade of D).

Many of AAII’s model portfolios have a rule that if there are no suitable replacements for a stock, the stock should remain in the portfolio until one with better prospects is found. I’ve been thinking about implementing a similar rule for my own portfolio, but with a twist. Since I don’t have a certain number of ETFs that I am required to hold in my portfolio, I could delete an ETF without replacing it. My only rule is that I shouldn’t hold more than seven ETFs at once (for diversification purposes), but what if I held five instead?

Based on their poor performance and gender equality grades of F, I will be removing the Global X Hydrogen ETF (HYDR) and the Global X Solar ETF (RAYS) from my portfolio. I won’t be replacing them with anything new at this time, but hopefully when my next portfolio review rolls around at year-end, I can find something worthy. The other two underperformers with grade slippage will be reevaluated at my next portfolio review as well. Maybe they can get those grades up before then!

With my midyear lump-sum investment of $2,000 added to my brokerage account, I will buy more shares of my current holdings and make sure the money is as evenly distributed as possible among the ETFs.

Using AAII’s My Portfolio tool, I checked how my portfolio would be diversified after removing these two ETFs. I found that my allocations to domestic and foreign stock moved closer to the recommendation from the AAII Aggressive Allocation Model:

Recently, AAII’s lead editor of the Stock Superstars Report (SSR) Matt Markowski wrote about the benchmark used for the SSR portfolio. Choosing a benchmark for my own portfolio has been on my mind for a while. According to the article, “A portfolio benchmark allows individual investors to gauge the relative performance of their portfolios.” Especially in the current investment environment with a lot of red, I thought it would be important to see how my portfolio is doing compared to the majority of environmental, social and governance (ESG) investments.

Most of the ESG indexes I initially found had companies in their top 10 holdings that I wouldn’t touch with a 10-foot pole (Amazon, Apple, Tesla, Microsoft). Many of the indexes I found had more of a domestic focus, but since I have a sizable allocation to foreign stock, I knew my benchmark index would need a global view. Finally, I stumbled on Morningstar’s Global Markets Sustainability index. Morningstar’s transparency made it easy to see exactly what the index holds and how it’s constructed:

Year to date through June 30, 2023, the Morningstar Global Sustainability index is up 14.3%. My own portfolio’s performance isn’t in positive territory, but it’s good to know that it’s possible to outperform while sustainably investing.

New Year, New Investments, Same Strategy

It’s time for some more investing! I accumulated another lump sum of $2,000 to add to my Schwab brokerage account, but I’m not sure how to distribute it. I know I want to add some new investments, but should I sell some too?

During the first time I invested back in March 2021, I chose seven index exchange-traded funds (ETFs) that fit my personal environmental, social and governance (ESG) criteria. I started with AAII’s ETF Screener and filtered for socially responsible ETFs with low and below-average expense ratios in their category. From there, I added my investing ideas to AAII’s My Portfolio tracking tool and ran them through As You Sow’s screener, which grades funds based on their investments in stocks of companies that are profiting from the fossil fuel industry, deforestation, gender inequality, sales of guns and military weapons, the prison industrial complex and tobacco.

Unfortunately, the market took quite the fall last year, putting some of my klutziest moments to shame. Most of my initial investments have lost value since purchase, but I know that it’s not the end of the world. AAII taught me that bull markets last longer than bear markets, and by that logic there is hope!

This time, I started my search for new investments with a specific category in mind: vegan food. I found some vegan socially responsible ETFs through AAII’s ETF Screener but most of them had sky-high expense ratios. For instance, the VegTech Plant-Based Innovation & Climate ETF (EATV) has an expense ratio of 0.75%, giving it a category expense ratio grade of F. On As You Sow, it gets almost all A’s, with a B for gender equality. I’m looking for ETFs with expense ratios below 0.60%, but also with category grades of C or better. One vegan ETF that came close was the U.S. Vegan Climate ETF (VEGN)—it has a 0.60% expense ratio, putting it just above my limit, but it also has C grades for gender equality and the prison industrial complex on As You Sow, making it a less sustainable investment.

I decided to switch gears and use As You Sow’s screener to find sustainable investments at the source. I set the filters for grades of B or better for all categories except gender equality, since this is a common one that companies miss. I chose to go for C grades or better for gender equality since it’s something I’m willing to accept as long the grade doesn’t get worse.

This gave me a few more ideas to add to my index ETF list in the AAII My Portfolio tool: VanEck BioTech ETF (BBH), ClearBridge All Cap Growth ESG ETF (CACG), IQ Cleaner Transport ETF (CLNR), Global X Green Building ETF (GRNR), VanEck Morningstar ESG Moat ETF (MOTE) and Schwab U.S. REIT ETF (SCHH).

I recalled reading way back in Michele Cagan’s “Investing 101” that I shouldn’t have more than six or seven ETFs in my portfolio, because at that point there is likely to be some duplication that doesn’t do my portfolio any good. Since I currently hold seven ETFs, I will have to make a sell decision in order to add any new ones to my portfolio.

To determine if I even have something to sell based on my investing strategy, I evaluated my current investments on how their As You Sow grades fared over the last 10 months. When I first invested in the seven ETFs, I made notes of their current As You Sow grades in the My Portfolio tool so I knew what made them attractive when I bought them. With this analysis, I found that two ETFs were potentially on the chopping block: Defiance Next Gen H2 ETF (HDRO) and Fidelity Clean Energy ETF (FRNW). When I bought it, Defiance Next Gen H2 didn’t have a meaningful gender equality grade, but it has since changed to F, and its fossil fuels grade fell from C to D. Fidelity Clean Energy’s fossil fuels grade fell from B to C and its gender equality grade remains at D. I’m mainly basing my analysis on the fossil fuels grades falling, since these grades are more important to my strategy and gender equality will likely be the biggest uphill battle of sustainable investing.

So, I have my crops to harvest, but what will I be replacing them with? From the list of index ETFs I found this time around, VanEck BioTech graded best with all A’s on As You Sow, and CleanBridge All Cap Growth ESG and IQ Cleaner Transport received all A’s and B’s. Schwab U.S. REIT is also a contender with just a grade of C for gender equality dragging it down. If I choose to remove the two ETFs that no longer fit my investing strategy, I will likely add two new ETFs to fill their spots. This means I have to narrow down my list of potential ETFs. But how?

It’s time to take a look at sector diversification. Right now, I have a lot of industrials exposure with a few Global X ETFs, so I don’t want to add any more investments in that category. This means IQ Cleaner Transport is off the table. From here, I chose the two ETFs with the lowest expense ratios and expense ratio grades of A: VanEck BioTech with a 0.35% expense ratio and Schwab U.S. REIT with 0.07%! These will add exposure to the health and real estate sectors and further diversify my portfolio.

Though I now have some sell rules in place for my investments, I don’t have a schedule for evaluating them. I’m currently operating on a roughly annual basis, but with the ESG investing landscape in flux, it might make more sense to review my portfolio midyear as well.

I’ll keep you updated on how my investments fare in 2023!

I read this so you don’t have to! The ESG Investing Handbook

Back in May after AAII Journal editor Charles Rotblut and I interviewed Larry Swedroe about environmental, social and governance (ESG) investing, publisher Harriman House reached out to us with copies of “The ESG Investing Handbook,” edited by Becky O’Connor. The book features interviews with a variety of U.K.-based asset managers and provides an overview of the global ESG investing landscape.

The book covers investing for the three different components of ESG, the performance of ESG investments, different ESG strategies, regulations and ratings, grassroots and investor engagement and what the future holds for ESG investors.

While there are a variety of opinions shared in the book that sometimes contradict each other, the introduction begins with an air of urgency and uncertainty, saying that “the global crisis is now so critical that only positive impact investments focused on solutions will do. According to this view, we don’t have time to engage with the old-world fossil fuel companies and they must be left behind completely. But in building an approach that seeks to be ‘good only,’ we may also be in danger of creating another fallacy—that positive impact is 100% perfect.”

In one interview, the Baillie Gifford Global Stewardship team discusses how “it is tempting to only invest in companies and funds that already have a positive impact, but the world doesn’t work that way.” Of course, we know that investments are not all green or all brown, and ESG investments’ ratings can change throughout their existence. But personally, I still struggle with the idea that I should be investing in a company or fund because of the promise of more sustainability in the future. It’s like getting into a relationship with someone who says, “Give me like five years to get my shit together.” That doesn’t sound like a good use of my time or money!

My favorite parts of the book are the helpful lists of sustainable companies. I’ll be revisiting these investing ideas when I add more money to my brokerage account in the new year! Some companies include Beyond Meat Inc. (BYND) for reducing its land use and carbon dioxide emissions, HP Inc. (HPQ) for increasingly using recycled plastic in production and Enphase Energy Inc. (ENPH) for its development of renewable energy products. Though I won’t be investing in individual stocks, these examples give me some direction on what funds to look for.

The figure below shows the sustainable development goals that were presented by the United Nations (U.N.) in 2017. The different values show “which of the goals have attracted the most investment—and which goals asset managers have struggled to meet.”

This provides more ideas for sustainable investments, but also shows where we need to do better or are otherwise lacking.

The book also provides some color on the fashion industry and its horrors. Not only do many of the top brands treat their employees like modern-day slaves—certainly not passing the social element of ESG—I learned that it takes “10,000 litres of water to make a pair of jeans” and “two billion people in the world live somewhere with inadequate water supply. The fashion industry relies on 98 million tonnes of non-renewable resources every year.” This is an egregious use of natural resources that are required for humanity to survive, and even more reason to shop second hand whenever possible.

Thankfully, “Regulations elsewhere are beginning to take root. In New York, the home of Sex and the City and Manolo Blahnik shoes, the Fashion Sustainability and Social Accountability Act was presented in January 2022, which could make New York ‘the first state in the country to pass legislation that will effectively hold the biggest brands in fashion to account for their role in climate change.’” When I looked up the status of this act, I noticed that it had yet to be passed. Legislation like this is vital, but the government works so slowly that by the time this act becomes a law, it may already be too late to reverse the damage. Maybe Carrie Bradshaw could pull some strings? 😏

I found the most interesting chapter to be the one about governance, the G in ESG. Prior to reading, I didn’t have much information on what governance really meant for a company. Essentially, governance is what connects the E and S: “How well a company meets environmental and social targets will ultimately come down to the strength of the governance—the ‘glue’ between a business and its stakeholders.”

When asked about how to know when good governance is working, Federated Hermes Ltd. chief risk and compliance officer Keith Davies says, “Ultimately, the key to demonstrating good governance is the success of the firm and its ability to deliver an appropriate strategy effectively, safely and without major issues or events. This includes showing progress on key ESG objectives—with clear and consistent reporting against target milestones.” Governance grounds the ESG strategy in evidence, measurables and actual impact to hold companies accountable for their actions and audit their sustainable progress.

If you are interested in investing sustainably, this book provides a great place to start with your research. I will definitely be returning to it for guidance and inspiration whenever I feel frustrated about my lack of ESG investing options.

Happy holidays, I’ll check in with you in the new year!

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Is Cannabis a Sustainable Investment?

In January 2020 when cannabis was legalized in Illinois, and even before then when states were rolling out their legislation, people were looking for a way to capitalize on the cannabis industry. I remember jokes flying around the AAII office about if we would ever have a featured speaker or writer on cannabis investments (giving buy low, sell high a whole new meaning!).

To put it bluntly, the main reason I’m not personally investing in cannabis is because there are still people in prison for it. I don’t believe I should profit from cannabis investments while people are wasting away in prison cells for something that is now legal for recreational consumption in 19 states and the District of Columbia.

But I still want to investigate if cannabis fits into a sustainable investing framework. I previously used As You Sow to find funds that are actually sustainable, not just labeled as such. So, let’s take a look at cannabis exchange-traded funds (ETFs) and see how they grade based on As You Sow’s criteria.

This article by AAII finance writer Matt Bajkowski briefly discusses the budding cannabis industry. Only one of the cannabis ETFs mentioned is available for As You Sow’s grades: Global X Cannabis ETF (POTX). Global X Cannabis gets grades of A for fossil fuels, deforestation, civilian firearms, prison industrial complex, military weapons and tobacco.


These grades made sense to me since cannabis investments represent a narrow slice of the overall stock market. Although I couldn’t get data on any other cannabis mutual funds or ETFs through As You Sow, I figured most of the results would be similar.

Even though the Global X Cannabis ETF got a grade of A for prison industrial complex, this just means that the ETF doesn’t directly invest in prisons. A broader view of the cannabis industry and who it affects directly and indirectly is important here. Along with a history of racism and the problematic words used to describe cannabis, including “marijuana,” there are still disproportionately more Black and Latino individuals in prison because of it.

In discussing the disparity in arrest rates, an article reported on the American Civil Liberties Union’s (ACLU) research, saying that “Despite roughly equal usage rates, Black people were 3.73 times more likely than white people to be arrested for marijuana.” In Iowa, Minnesota, Illinois and Washington, D.C., this difference increases to between 7.5 and 8.5 times more likely.

On the environmental side of things, it appears on the surface that cannabis is a sustainable industry. But a quick search revealed that there are concerns about the use of energy and water to grow cannabis plants. An article from Bloomberg on the environmental impact of cannabis noted, “cannabis plants suck up around twice as much water as maize, soybeans, wheat and wine grapes, according to a 2021 study in the Journal of Cannabis Research.” This could be ironed out as the industry grows, and as more efficient energy is sourced.

Like with any industry, some aspects will be green and others will be brown—as Larry Swedroe said in our interview with him about environmental, social and governance (ESG) investing earlier this year. Cannabis benefits people suffering from anxiety, post-traumatic stress disorder (PTSD) and depression. Legalizing cannabis also boosted the economy, created jobs and decreased crime in areas where people began drinking less alcohol in favor of cannabis.

The decision to invest in cannabis is entirely up to you. It doesn’t fit into my personal investing strategy, but hopefully as states continue to legalize cannabis for medical and recreational use, those who are wrongfully imprisoned will be released, and the industry can become even more regulated to ensure that cannabis can be grown and maintained sustainably.

The World Isn’t Green and Brown

“Your green is somebody else’s brown.”
—Larry Swedroe

For the May 2022 issue of the AAII Journal, editor Charles Rotblut and I interviewed Larry Swedroe about his book with Samuel C. Adams, “Your Essential Guide to Sustainable Investing.” You can read the interview here!

As you’ve probably gleaned from my other blog posts about sustainable investing, investors are hitting many roadblocks on their way to finding companies and funds that are not only labeled as sustainable, but are truly acting on that label. With that in mind, I asked Larry whether having regulations set for environmental, social and governance (ESG) and sustainable investment labels would help.

Part of his answer made me hopeful for the future of sustainable investing: “There are a lot of people who say, ‘I really want to help the planet and I’m worried about climate change, so I’m going to screen out energy companies.’ To me, this would be a bad decision. We want to support companies that are creating technologies that improve the planet. The industry that’s working to create a greener planet (as it produces the most green patents) is the one that everyone vilifies: energy.

“If you screen energy companies out, you raise their cost of capital, making it more difficult for them to invest. A better strategy would be to use a best-in-class kind of rating system. This could lead you to consider investing in the energy companies that are making the most progress toward a greener planet.”

Just as the world isn’t black and white, with much room for gray and nonbinary thinking, the world isn’t divided into green (virtuous and sustainable) and brown (vice and sin) either—there’s a lot of muddiness in between.

Something that Larry stressed throughout our interview was that the individual investor is the one who must decide what their sustainable investing strategy looks like: “I don’t think there’s a right answer. There’s one right answer for each person, depending upon how deeply they feel about these issues and how deep into the weeds they want to get.”

One benefit of sustainable investing for me was that it really narrowed down my choices. There are thousands of things I could invest in, but once I made sure what I was putting my money into was sustainable, had low fees and was helping more than hurting the earth, I ended up with under 10 exchange-traded funds (ETFs) that fit those specific criteria at the time.

I’m still finalizing what my investing strategy will be, while also looking for future investments. Investing sustainably was my entry point, and I hope it helps you too!

Bonus: Part of our interview with Larry Swedroe is also available in video form! You can see what I look like inches away from a nervous breakdown, something I only share with my closest friends! Enjoy 😉