Investing
Zoe Team and George Newfield, CFA, CFP®, CKA®, CAIA (Zoe Network Advisor)
7 min read
Faith-based investing aligns your portfolio with personal values without necessarily sacrificing financial returns.
Various strategies exist to screen investments based on ethical, religious, or social criteria.
Clear communication with a financial advisor helps define your values and build a suitable, principled investment strategy.
Yes. Faith-based investing allows you to filter companies based on religious values, excluding industries that conflict with your beliefs while still seeking growth.
Not necessarily. Research suggests that well-managed, principled portfolios can perform competitively with traditional market benchmarks over the long term.
Identify your core values or religious mandates, and work with a financial advisor to create a screening process that excludes incompatible assets from your holdings.
Child labor, climate change, tobacco, access to education, and renewable energy are all issues at the center of values-based investing.
Child labor, climate change, tobacco, access to education, medical research, and renewable energy… These are all issues at the center of values-based investing. The rise of values-based investing has led to some of the most significant changes in decades in the investment industry.
What is values-based investing? It is investing for returns (income and gains) while making a difference in the world. ‘How’ you make this difference depends on what your values are. The Cambridge Dictionary defines values as “the principles that help you to decide what is right and wrong, and how to act in various situations.” We must recognize the subjectivity of this definition. Values are shaped by personal experiences, beliefs, and traditions, making them vary from one individual to the next. There are as many ways to reflect our values in investing as there are ways to wear clothing.
Some people prefer certain brands of clothing to the exclusion of others, while others are more interested in the impact clothing has on their appearances. Others simply look for whatever fits their style. Values-based investing works similarly, given the wide range of options. However, one rule transcends beliefs, cultures, and time. Many of us know it as ‘The Golden Rule’: we are to treat others as we would like to be treated. What if we could invest to earn returns while also promoting the values we believe will help the world and all those in it to flourish?
At first, all this talk about doing good in the world may appear out of place in the context of investing. Indeed, a philanthropic-minded person can make an impact by giving of their time, talents, and treasures. So, what is the difference between values-based investing and philanthropy?
A critical difference between values-based investing and philanthropy is the component of productive capital. Productive capital can produce returns while simultaneously making an impact. Companies can make a profit by building and selling products that impact people’s health or funding research to save lives and alleviate suffering. Where you invest is selected by choice and it’s not limited to stocks. According to The Forum for Sustainable and Responsible Investing, “Sustainable investing spans a wide range of products and asset classes, embracing not only public equity investments (stocks), but also cash, fixed income (bonds), and alternative investments, such as private equity, venture capital and real estate. Sustainable investors are like other investors in seeking a competitive financial return on their investments.”
With values-based investing, many investors consider what businesses their retirement savings support and how those businesses align with their values. The most prevalent form of values-based investing is known as ESG.
The acronym ESG was first coined in the early 2000s and stands for Environment, Social, Governance. The environmental component of values-based investing focuses on investing in companies that are mindful of their environmental impact by reducing carbon emissions, water stress, pollution, and focusing on clean energy. According to an ESG Global Study 2022 by the Capital Group, “E” Environment is the most significant part of ESG. The “S” looks at companies’ efforts to protect people and communities, paying attention to human and labor rights, product safety, access to capital, etc. Governance, or “G,” refers to board diversity, executive pay, business ethics, and anti-competitive practices, among other variables. This style of values-based investing looks at many aspects of a company and assigns “ESG Scores” based on how companies rank on the various facets of E, S, and G, respectively.
Sustainable Investing is a form of values-based investing. Though sometimes the terms are used interchangeably, sustainable investing generally entails more active involvement by the investor.
According to the Forum for Sustainable and Responsible Investing, “Just as there is no single approach to sustainable investing, there is no single term to describe it. Depending on their emphasis, investors use labels such as: “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “socially responsible investing,” and “values-based investing,” among others.”
Sustainable investing often involves investors advocating for specific values-based outcomes. This could mean having influence with boards and company leadership advocating for better ways to allocate productive capital. It could also mean investing in a specific project with measurable ESG goals. This catch-all category has grown tremendously in recent years and is posed to see continued growth in future years. The graph below shows the current and expected proliferation of Sustainable Investing.
Another values-based investing mix is “SRI,” or Socially Responsible Investing. SRI is less concerned with a score and more concerned with avoiding certain companies that may be involved in ethically challenging practices or products. Examples include tobacco, alcohol, firearms, and environmental damage. SRI investors will exclude entire industries, while ESG may invest in companies that are the “best house in a bad neighborhood.”
Impact Investing takes an even more positive approach to investment. Instead of excluding bad actors, impact investors target companies and projects that will yield the greatest good for people, communities, and the environment. According to the Global Impact Investing Network, “The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education.” By considering the big picture, impact investing prioritizes the issues that will facilitate the most significant positive impact.
Faith-based Investing is a timeless form of values-based investing. The most prominent value sets represented in faith-based investing are Catholic, Protestant, Jewish, and Sharia. Faith-based investing can adopt various values-based investing styles.
For one, it can take the form of SRI screens to avoid investing in companies involved with such things as tobacco, pornography, and child labor. Faith-based investing can also take the form of impact investing, such as providing housing for vulnerable communities. Finally, advocacy with corporate boards is another way that faith-based investors allow their values and impact corporate actions.
If a business refrains from hurting its stakeholders (clients, employees, communities) and considers their interests and those of its shareholders, then that business should prosper. These intentions, when combined with the prioritization of making a positive impact in the world, investment performance seems to increase.
According to The Forum for Sustainable and Responsible Investing, “A growing body of research demonstrates that sustainable investment funds on average over the long-term achieve comparable or even better financial returns than conventional investments.” This topic has been well studied. An NYU Stern study from 2021 that looked at over 1000 research papers examining ESG and financial performance showed that out of the 1000+ research papers, 58% of the studies demonstrated a positive relationship between ESG and financial performance, and only 8% showed a negative relationship.
Although values-based investing is not new to the investment industry, it may be new for you. As with anything new, the fear of the unknown or analysis paralysis can keep you from acting. If this happens, remember the golden rule, and don’t be afraid to try something new! If you don’t know where to start constructing a portfolio that aligns with your values, finding the right advice can help. Talk to a financial advisor that can support your decisions and start aligning your investments and your values.
Child labor, climate change, tobacco, access to education, and renewable energy are all issues at the center of values-based investing.
Child labor, climate change, tobacco, access to education, medical research, and renewable energy… These are all issues at the center of values-based investing. The rise of values-based investing has led to some of the most significant changes in decades in the investment industry.
What is values-based investing? It is investing for returns (income and gains) while making a difference in the world. ‘How’ you make this difference depends on what your values are. The Cambridge Dictionary defines values as “the principles that help you to decide what is right and wrong, and how to act in various situations.” We must recognize the subjectivity of this definition. Values are shaped by personal experiences, beliefs, and traditions, making them vary from one individual to the next. There are as many ways to reflect our values in investing as there are ways to wear clothing.
Some people prefer certain brands of clothing to the exclusion of others, while others are more interested in the impact clothing has on their appearances. Others simply look for whatever fits their style. Values-based investing works similarly, given the wide range of options. However, one rule transcends beliefs, cultures, and time. Many of us know it as ‘The Golden Rule’: we are to treat others as we would like to be treated. What if we could invest to earn returns while also promoting the values we believe will help the world and all those in it to flourish?
At first, all this talk about doing good in the world may appear out of place in the context of investing. Indeed, a philanthropic-minded person can make an impact by giving of their time, talents, and treasures. So, what is the difference between values-based investing and philanthropy?
A critical difference between values-based investing and philanthropy is the component of productive capital. Productive capital can produce returns while simultaneously making an impact. Companies can make a profit by building and selling products that impact people’s health or funding research to save lives and alleviate suffering. Where you invest is selected by choice and it’s not limited to stocks. According to The Forum for Sustainable and Responsible Investing, “Sustainable investing spans a wide range of products and asset classes, embracing not only public equity investments (stocks), but also cash, fixed income (bonds), and alternative investments, such as private equity, venture capital and real estate. Sustainable investors are like other investors in seeking a competitive financial return on their investments.”
With values-based investing, many investors consider what businesses their retirement savings support and how those businesses align with their values. The most prevalent form of values-based investing is known as ESG.
The acronym ESG was first coined in the early 2000s and stands for Environment, Social, Governance. The environmental component of values-based investing focuses on investing in companies that are mindful of their environmental impact by reducing carbon emissions, water stress, pollution, and focusing on clean energy. According to an ESG Global Study 2022 by the Capital Group, “E” Environment is the most significant part of ESG. The “S” looks at companies’ efforts to protect people and communities, paying attention to human and labor rights, product safety, access to capital, etc. Governance, or “G,” refers to board diversity, executive pay, business ethics, and anti-competitive practices, among other variables. This style of values-based investing looks at many aspects of a company and assigns “ESG Scores” based on how companies rank on the various facets of E, S, and G, respectively.
Sustainable Investing is a form of values-based investing. Though sometimes the terms are used interchangeably, sustainable investing generally entails more active involvement by the investor.
According to the Forum for Sustainable and Responsible Investing, “Just as there is no single approach to sustainable investing, there is no single term to describe it. Depending on their emphasis, investors use labels such as: “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “socially responsible investing,” and “values-based investing,” among others.”
Sustainable investing often involves investors advocating for specific values-based outcomes. This could mean having influence with boards and company leadership advocating for better ways to allocate productive capital. It could also mean investing in a specific project with measurable ESG goals. This catch-all category has grown tremendously in recent years and is posed to see continued growth in future years. The graph below shows the current and expected proliferation of Sustainable Investing.
Another values-based investing mix is “SRI,” or Socially Responsible Investing. SRI is less concerned with a score and more concerned with avoiding certain companies that may be involved in ethically challenging practices or products. Examples include tobacco, alcohol, firearms, and environmental damage. SRI investors will exclude entire industries, while ESG may invest in companies that are the “best house in a bad neighborhood.”
Impact Investing takes an even more positive approach to investment. Instead of excluding bad actors, impact investors target companies and projects that will yield the greatest good for people, communities, and the environment. According to the Global Impact Investing Network, “The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education.” By considering the big picture, impact investing prioritizes the issues that will facilitate the most significant positive impact.
Faith-based Investing is a timeless form of values-based investing. The most prominent value sets represented in faith-based investing are Catholic, Protestant, Jewish, and Sharia. Faith-based investing can adopt various values-based investing styles.
For one, it can take the form of SRI screens to avoid investing in companies involved with such things as tobacco, pornography, and child labor. Faith-based investing can also take the form of impact investing, such as providing housing for vulnerable communities. Finally, advocacy with corporate boards is another way that faith-based investors allow their values and impact corporate actions.
If a business refrains from hurting its stakeholders (clients, employees, communities) and considers their interests and those of its shareholders, then that business should prosper. These intentions, when combined with the prioritization of making a positive impact in the world, investment performance seems to increase.
According to The Forum for Sustainable and Responsible Investing, “A growing body of research demonstrates that sustainable investment funds on average over the long-term achieve comparable or even better financial returns than conventional investments.” This topic has been well studied. An NYU Stern study from 2021 that looked at over 1000 research papers examining ESG and financial performance showed that out of the 1000+ research papers, 58% of the studies demonstrated a positive relationship between ESG and financial performance, and only 8% showed a negative relationship.
Although values-based investing is not new to the investment industry, it may be new for you. As with anything new, the fear of the unknown or analysis paralysis can keep you from acting. If this happens, remember the golden rule, and don’t be afraid to try something new! If you don’t know where to start constructing a portfolio that aligns with your values, finding the right advice can help. Talk to a financial advisor that can support your decisions and start aligning your investments and your values.
Disclosures: Zoe Financial, Inc. ("Zoe Financial") is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Zoe Financial provides investment advisory services and access to independent registered investment advisers through its platform. The information provided by Zoe Financial is for educational and informational purposes only and should not be construed as personalized investment advice or as an offer to buy or sell any security. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results. Clients should consult with their own financial, tax, or legal professionals before making any investment decisions. The material presented by Zoe Financial is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Material presented has been gathered from sources believed to be reliable, however Adviser cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Past performance is no guarantee of future results. Zoe Financial does not provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice. SEC Registration does not constitute an endorsement of Zoe Financial by the SEC nor does it indicate that Zoe Financial has attained a particular level of skill or ability. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be appropriate for all clients. Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. Lower expenses do not guarantee better investment performance. Certain information contained herein may constitute forward-looking statements. Due to various risks and uncertainties, actual events, results or the performance of a fund may differ materially from those reflected or contemplated in such forward-looking statements.
Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
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Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
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New York, NY, 10017
Copyright © 2026 Zoe Financial, Inc. | All rights reserved
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Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
Explore the Zoe Wealth Platform with AI
Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
(646) 680-9244
support@zoefin.com
666 Third Ave, 6th Floor
New York, NY, 10017
Copyright © 2026 Zoe Financial, Inc. | All rights reserved
Find an Advisor
Retirement Planning
Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
Explore the Zoe Wealth Platform with AI
Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
(646) 680-9244
support@zoefin.com
666 Third Ave, 6th Floor
New York, NY, 10017
Copyright © 2025 Zoe Financial, Inc. | All rights reserved
