Millennials in the UK are driving a fundamental shift in finance, increasingly demanding that their investments align with their values. For this generation, financial returns are not enough; there must also be a clear consideration of Environmental, Social, and Governance (ESG) factors. Fortunately, the UK market offers numerous accessible and effective pathways to build an ethical and sustainable portfolio.

1. Understanding Ethical Investing: ESG vs. Impact

Before investing, it’s vital to clarify your goals, as ethical investing has several shades:

• ESG (Environmental, Social, Governance) Investing: This is the most common approach. It involves screening companies based on non-financial factors:
  • E (Environmental): Carbon footprint, waste management, renewable energy use.
  • S (Social): Labour practices, diversity, community relations.
  • G (Governance): Board structure, executive pay, anti-corruption.
• Impact Investing: This is a more targeted approach, aiming to deliver measurable, positive social or environmental returns alongside a financial return. This often involves investing in specific