What Is Values-Aligned Investing? Our Approach at Blue Marble
- ✓ It is not always obvious what you actually own. Most diversified funds hold hundreds of companies, which can make it difficult to know whether your investments truly reflect the issues and values that matter to you.
- ✓ At Blue Marble, ESG is not a label we add after the fact. Every fund we use in our ESG portfolios must be ESG by design, with environmental, social, and governance standards built directly into the fund's mandate and prospectus.
- ✓ Our fossil-free portfolios go beyond simply reducing carbon exposure. They apply the same broader ESG standards as our core portfolios while also screening out companies involved in the production, manufacturing, or distribution of coal, oil, and natural gas.
- ✓ You do not have to guess how aligned your current investments are. We offer complimentary ESG comparison reports that can show where your existing portfolio aligns with your values, where it may not, and how it compares with a Blue Marble portfolio.
- ✓ Investing according to your values does not mean you have to give up competitive long-term performance. A well-constructed ESG portfolio can still be diversified, cost-conscious, and designed around the same financial goals as a traditional portfolio.
What Does Values-Aligned Investing Actually Mean?
Your money is already making a statement about the world you want to live in. The only question is whether it’s saying what you actually believe.
Most of us already bring our values into the choices we make with our money, often without a second thought. We choose one company over another because of how it treats its people, steer clear of products that harm the environment, or go out of our way to support businesses whose practices we believe in. Yet when it comes to investing, that connection quietly disappears. A single mutual fund or ETF may hold hundreds of companies, and very few people have the time to comb through every holding, which can leave a real gap between what you care about and what your savings are actually funding.
Many of the clients who find their way to us have already tried to close that gap with another advisor. Some told them climate change weighed on them, while others were moved by a social, political, or global issue and hoped to see their portfolio reflect it. Still others simply wanted to understand the impact of their investments. Too often, they walked away feeling like those concerns never truly made it into their portfolio.
At Blue Marble, these conversations aren’t something we have to make room for. ESG isn’t a language we’ve had to learn, it’s the one we’ve always spoken, and whatever issue matters most to you, we’ll take the time to understand it and help you see it reflected in what you own.
Our role isn’t to tell you what your values should be. It’s to listen, and then to build a financially sound portfolio that honors your priorities as fully as we reasonably can. We’ve never believed that investing responsibly and investing well have to be separate goals, and with care and intention, your portfolio can serve both.
How Values-Aligned Investing Works at Blue Marble
We generally approach values-aligned investing in three ways, and each one plays its own part.
Investing intentionally. We look for companies and funds that meet both our financial standards and our environmental, social, and governance criteria. Values matter deeply to us, but so do the fundamentals: diversification, risk, cost, and the role each investment plays within your broader portfolio.
Screening out certain industries and business practices. Some companies and activities simply don’t belong in our standard ESG portfolios. Screening lets us reduce exposure to businesses that conflict with the environmental and social standards built into our investment process, so you can feel confident about what you own.
Engaging as shareholders. Owning a company also gives you a voice in how it’s run. In every one of our portfolios, the underlying funds actively vote on your behalf, using proxy voting, direct engagement with company leadership, and collaboration with other responsible investors to push for better disclosure, stronger governance, and more responsible business practices. You don’t need to become an expert on shareholder resolutions or keep track of annual meetings, because that advocacy is already happening quietly in the background of your portfolio.
That last piece matters more than many people realize, because sustainable investing isn’t only about deciding what not to own. Selling a stock doesn’t, on its own, change how a company behaves, but staying invested and using that ownership to advocate for improvement can help move companies in a better direction over time.
For us, these three approaches work best together, each one strengthening the others so your portfolio can reflect your values in more than one way.
Our Screening Standards
One of the most important distinctions in how we build portfolios is that we are not simply taking a traditional fund and calling it ESG because it happens to score well on a third-party rating.
Every fund we incorporate into our ESG portfolios must have an ESG mandate and be ESG by design.
In practical terms, that means the fund itself is built around environmental, social, and governance considerations, with those standards incorporated directly into its investment process and prospectus. The screening is part of how the fund is designed to invest, not something we are layering on after the fact.
Core ESG Portfolio
Our core ESG portfolios apply a broad range of environmental, social, and governance screens across the funds we select.
Tobacco and civilian firearms are two examples that tend to be easy to explain, but they are only a small piece of a much larger screening process.
Depending on the underlying fund, screens may address areas such as controversial weapons, environmental practices, human rights, labor standards, corporate governance, and other business activities that do not meet the fund's established ESG criteria.
The specific methodology will vary somewhat from one fund manager to another, which is why part of our due diligence is understanding not just whether a fund markets itself as sustainable, but what its actual mandate requires it to do.
Fossil-Free Portfolio
Our fossil-free portfolios start with the same ESG foundation.
The same broader environmental, social, and governance standards still apply, but we add a much stricter screen when it comes to fossil fuels.
For these portfolios, that means screening out companies involved in the manufacturing, distribution, or production of coal, oil, or natural gas.
The idea is not simply to own a portfolio that has slightly lower carbon emissions than the broader market. For clients who feel strongly about fossil fuel exposure, we want the distinction to be meaningful.
That makes our fossil-free approach a better fit for clients who want the broader ESG framework but also want a more stringent line drawn around fossil fuels.
Going One Step Further With Individual Stocks
The ESG funds themselves follow their own established mandates, which means we cannot simply add custom screens to an underlying fund based on an individual client's preferences.
Where we do have more flexibility is within the individual stock portion of a client's portfolio.
Some clients want their investments to reflect specific priorities, from clean energy and EV technology to water resources, healthcare innovation, responsible financial institutions, and technology companies with strong governance practices. We can talk through those priorities and be thoughtful about the individual companies we include so that this portion of the portfolio reflects those values more closely.
That gives us another layer of personalization without changing the underlying investment mandate of the ESG funds themselves.
For us, that balance is important. We want the portfolio to feel personal, but it still needs to remain diversified, financially sound, and aligned with the client's broader investment strategy.
Not Sure How Your Current Portfolio Measures Up?
A lot of people come to us knowing they want to invest more sustainably, but they have no idea what is actually inside their current portfolio.
Even when an investment has "ESG," "sustainable," or "responsible" in the name, it can be difficult to tell what those terms actually mean, how strict the underlying screens are, or whether the companies inside the portfolio line up with the issues you care about.
That is why we offer complimentary ESG portfolio comparison reports for prospective clients using YourStake, a New York-based ESG and values-alignment research platform.
YourStake allows us to look more closely at the investments you already own and compare them with a values-aligned portfolio across a range of environmental and social issues.
The goal is not to give your portfolio a generic ESG score. It’s to make the conversation more concrete.
We can look at where your current investments are already aligned with your values, where there may be exposures you were not aware of, and how a Blue Marble portfolio might compare.
For many people, seeing the two portfolios side by side is much more useful than simply being told that one investment is "more sustainable" than another.
Curious how your current portfolio compares?
Send us a recent investment statement and we can prepare a complimentary ESG comparison report so you can see how your existing investments line up with the issues that matter most to you.
Does Investing According to Your Values Mean Giving Up Returns?
This is the question we probably hear more than any other, and we completely understand why. When you’ve worked hard to build your savings, the last thing you want is to feel like you’re trading your financial future for your principles.
Your portfolio still has real work to do. It might need to fund your retirement, generate income, support your family, preserve wealth, or carry you toward goals that are decades away. Caring about the world shouldn’t mean setting any of that aside, and in our experience, it doesn’t have to.
Over long stretches of time, broad ESG indexes and traditional market indexes have generally moved in much the same direction. There will always be seasons when one pulls ahead of the other, and that’s simply what happens whenever two portfolios own different companies, so it isn’t something to worry about on its own.
What matters far more, we believe, is the care that goes into building your portfolio as a whole. That means making sure it’s thoughtfully diversified, matched to how much risk you’re comfortable with and how long you plan to invest, mindful of costs and taxes, and anchored at every step to the life you’re working toward.
Bringing your values into the conversation doesn’t lower the bar. If anything, it asks us to hold ourselves to an even higher one, because your money should be working for both your future and the world you want to see.
Over this period, the ESG-screened index actually came out slightly ahead of the broader market, with nearly identical ups and downs along the way. We share that not as a promise, because no one can predict which approach will lead in the years ahead, and there will certainly be stretches when the broader market does better. What we find meaningful is that, over a long and eventful period, investing with your values in mind didn’t require giving up competitive returns or taking on extra risk.
And that’s really the heart of it. You shouldn’t have to choose between building a secure future and investing in a way that feels true to who you are. With a thoughtfully constructed portfolio, you can work toward both at the same time.
FAQs
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ESG stands for environmental, social, and governance factors. These are criteria that can be used to evaluate how a company operates, manages risks, treats stakeholders, and approaches issues such as climate change or corporate governance.
Values-aligned investing is broader. It starts with the investor and asks: What matters to you, and how can we reasonably reflect that in your portfolio?
ESG research is one of the tools we use to answer that question.
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Not necessarily.
Applying investment screens will change what a portfolio owns, which means its performance will not be identical to an unscreened benchmark. Some periods will favor one approach over another.
Our goal is not to promise that values-aligned investing will outperform. It is to construct a diversified portfolio that remains appropriate for your financial goals while incorporating the issues that matter to you.
As with any investment strategy, there are risks, and past performance cannot guarantee future results.
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The underlying ESG funds follow their own established mandates, so we cannot add custom screens directly to those funds.
However, in portfolios that include an individual stock sleeve, we can be more intentional about the companies we select and use that portion of the account to better reflect the issues that matter most to you.
That gives us room to personalize the portfolio while still preserving the broader ESG framework and diversification of the strategy.
What Does This Look Like for You?
There’s no single definition of the perfect values-aligned portfolio, because no two people come to this work for quite the same reasons. For one client, stepping away from fossil fuels is what matters most, while someone else may feel most strongly about weapons, human rights, or the way companies treat their workers and the communities around them. Others simply want the reassurance that environmental, social, and governance considerations are woven into how their money is invested, without needing a long list of restrictions.
Whatever brings you here, our job is to listen to what matters to you, find what’s possible within your portfolio, and make sure those choices keep supporting the bigger financial picture you’re building toward.
Many of our clients tell us they spent years feeling like something was missing from their conversations about money. They knew exactly what they cared about, but they never felt sure those values were actually showing up in their investments, and no one seemed to be asking. We’d love to help close that gap and make the connection between your money and your values something you can see clearly and feel good about.
If you’re curious what a values-aligned portfolio could look like for you, we’d be glad to sit down and explore it together.
This article is for informational purposes only and does not constitute investment, legal, or tax advice. Values-aligned and ESG investing strategies may not be appropriate for every investor, may limit the types of investments available in a portfolio, and may result in performance that differs from a benchmark that does not apply the same screens. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal. Please consult with a Blue Marble advisor regarding your individual circumstances before making investment decisions.
Disclosure: Blue Marble Investments is an SEC registered investment adviser. SEC registration does not constitute an endorsement by the SEC nor does it indicate that Blue Marble has attained a particular level of skill or ability. This material is for informational purposes only and is not intended to serve as personalized tax, legal, or investment advice. Please consult with your tax and/or legal professional regarding your specific situation when determining if any mentioned strategies are right for you.*