There’s different ways to be ethical in finances.

One option is to just not be anxious about investing in “bad” companies and make money, but then turn around and donate to charities, vote for aligned politicians, and vote in shareholder elections.

Or you could try to invest in “better” companies. ESG (Environmental, Social, Governance) based investing has been politicized and isn’t perfect because the scoring can be and is manipulated. But at least it’s trying. For example, normally ETFs management companies take the shares that you effectively own and vote along with the board recommendations which often aligns with making the most money over environmental and social concerns, but funds like $VOTE so those voting rights to vote in ways they think are more ethical. Vanguard has $ESGV. Black Rock, a huge investing company, offers voting choice which allows you to pick alignment strategy. For example, you could pick to vote for environmental reasons and they’ll influence the company that way. Support for that depends on your brokerage and the fund you own.

You could also pick individual stocks and never buy companies that don’t align with your ethics, but that has its own complexities because now you’re actively investing and probably not matching market returns.

Ultimately, ethics aren’t black and white. I don’t try to be perfectly ethical in my investing because it just causes too much anxiety asking is this company bad or good? I invest in broad market funds, I vote in all elections (both shareholder and government elections), I don’t invest in individual companies I don’t agree with, I invest in some climate friendly ETFs, and I donate to charities that I like.

This situation reminds me of a plot in The Good Place, a TV show, about how everybody went to the “bad place” because modern society had so many decisions that had small negative consequences.