How to balance your financial goals and values

Do you want your financial decisions to reflect what matters to you while also delivering returns? Incorporating ESG (environmental, social, and governance) factors could be right for you, but it’s essential that your finances also align with your goals.

ESG investing involves considering non-financial factors when investing. The factors fall into three broad categories:

• Environmental: This pillar focuses on areas that protect the natural world. It might include climate change, biodiversity, or water management.
• Social: This category measures how a company interacts with people, from its employees to the communities in which it operates. Factors you might consider include labour standards, human rights, and customer satisfaction. 
• Governance: This pillar reviews how a company operates. Investors might consider shareholder rights, executive pay, and transparency.

Investors who consider ESG factors often want to align their financial decisions with their personal beliefs. For example, if you’re taking steps to reduce your carbon footprint or support companies that pay workers fairly, extending this outlook to your investments may make sense. 

However, simply choosing investments because they align with your values could be a mistake. After all, you still want to generate a return and it’s important that your investment decisions are appropriate for you. 

Please note: The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past performance is not a reliable indicator of future performance and should not be relied upon.

4 practical steps that could help you build an ESG investment portfolio

1. Define which ESG factors you’d like to focus on

ESG factors cover a huge range of issues. Before you start investing, identifying which values matter most to you could be useful. This could help provide some direction when evaluating investment opportunities.

One common way to incorporate ESG issues into your investments is to choose an ESG fund. A fund pools your money with that of other investors to invest in a range of companies. ESG funds use labels and disclosures to explain how the fund invests.

For example, a “green” fund would focus on investments that support environmental sustainability, such as renewable energy or waste management. 

2. Set clear financial objectives

To balance your personal goals and values, you also need to set clear financial objectives before you invest.

What is your reason for investing? Whether you’re putting money away for retirement or for your child’s future, your objective will influence what investments are right for you. It could affect your investment time frame or whether you want the investments to deliver an income or growth. 

3. Be clear about your risk profile 

Your financial objectives will also affect what level of risk is appropriate for you.

All investments carry some risk. However, the level of risk varies between different opportunities. The amount of risk that is appropriate for you will depend on a variety of factors, such as your investment time frame, what other assets you hold, and your overall attitude to risk. 

Your financial planner could help you understand your risk profile and how it might affect your investment decisions. 

An investment that aligns perfectly with your values might be tempting, but if it involves taking more risk than your risk profile suggests is appropriate, it’s probably not right for you. You should be prepared to walk away from investments if they don’t suit your financial needs. 

4. Evaluate opportunities with a double bottom line

As with all investments, reviewing the performance of ESG investments is essential. 

You might want to assess performance using a double bottom line – the returns generated and whether they continue to reflect your values. Regular reviews with your financial planner could help you do this and assess whether adjustments might be needed to ensure your portfolio suits your needs. 

Striking the right balance between values and returns is often possible

Fortunately, the adoption of ESG practices is spreading and it’s often possible to find investment opportunities that align with both your financial and ethical goals.

However, there may be times when it might not be possible to find an investment that ticks every ESG box. So, as mentioned above, identifying which factors matter most to you could be useful.

You should also keep in mind that investment returns cannot be guaranteed. The value of your investments might fall as well as rise, and you could get back less than you invested. 

Contact us

If you’d like to discuss how you could invest, including taking ESG factors into consideration, please get in touch to arrange a meeting. 

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past performance is not a reliable indicator of future performance and should not be relied upon.

FP39009 – APPROVED BY 2PLAN WEALTH MANAGEMENT ON 10.08.2026

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