Vox: “It’s easier than ever to invest ethically — or, at least, to be told by marketers you are. Whether you’re actually doing it is harder to figure out. Investors have become eager to put their money toward good in recent years. In 2020, assets under management using sustainable investing strategies in the United States reached $17.1 trillion, according to a report from the Forum for Sustainable and Responsible Investing. That’s one of every three dollars under professional management in the country. Investments that consider environmental, social, and governance factors— or ESG — are gaining more public attention, too. There are over 800 registered investment companies with ESG assets. It’s good that the general public, including investors, is trying to pay attention to where money flows. What isn’t so good: Plenty of people think they’re investing in ways that match their values when in reality, they aren’t. It’s really easy to slap the ESG label onto an investment product, likely increase fees on it a little bit, and call it a day. Plenty of big investors claim they’re managing their money in an environmentally friendly, socially responsible way — and assume nobody’s peeking behind the curtain.

I compare it to the ’70s, when everybody was labeling their food as organic and the government was like, ‘Hey, there’s a definition to that word,’” said Nell Minow, vice chair of ValueEdge Advisors, a consulting firm that focuses on corporate governance. Currently, there’s no solid definition for ESG. This isn’t to say that investing ethically is impossible — though there are some experts, including Fancy, who would argue that it is largely the case. Either way, it’s a much thornier issue to navigate than meets the eye. Plenty of people would be surprised to learn the fossil fuel-free fund they’ve got their 401(k) in isn’t so fossil fuel-free, or that the company providing them the fund — such as BlackRock, State Street, and Vanguard — may happily vote for bloated CEO pay packages and against disclosures on items such as diversity and climate…”