Sustainable Investing Isn't New: From Quaker Conviction to Modern ESG Portfolios

Key Takeaways

• ✓ Sustainable investing is not a new idea. For centuries, people have asked what their money should support, long before anyone used terms like ESG or fossil-free. •
• ✓ Its roots are in conscience, not marketing. Faith communities such as the Quakers and Methodists set moral limits on financial activity, laying the groundwork for what we now call exclusionary screening.
• ✓ Divestment has long been a tool for social change. From tobacco and the Vietnam War to apartheid and fossil fuels, investors have used their portfolios to respond to the major issues of their time.
• ✓ ESG expanded values-based investing rather than replacing it. The framework, formally introduced in 2004, added a shared language for evaluating how companies manage environmental, social, and governance risks.
• ✓ The core question has never changed. Whether you're opening your first account or reviewing an institution's assets, sustainable investing starts with looking closely at what you own and deciding whether it reflects what you value.

Is Sustainable Investing Really a New Idea?

Sustainable investing is often described as a modern idea, something that grew out of ESG headlines, climate concerns, and a newer generation of investors who want their money to mean something beyond performance alone. But the practice of aligning money with values has a much longer history.

Long before investors used terms like ESG (environmental, social, and governance), fossil-free portfolios, or sustainability ratings, individuals and institutions were already asking a familiar question:

What should my money support?

That question has shaped generations of financial choices. It has appeared in religious traditions, social movements, public health campaigns, university endowments, pension funds, and today's professionally managed investment strategies. For centuries, people have used money not only as a tool for accumulation, but also as an expression of conviction, identity, and responsibility.

While the language has changed over time, the heart of the question has remained remarkably consistent. When we invest, we are not simply setting money aside and hoping it grows. We are choosing, whether intentionally or not, which companies, industries, and systems receive our capital.

This is the story of how investors have answered that question over time, and why it still matters today.

How Did Faith Communities Shape Values-Based Investing?

The roots of sustainable investing are often traced to religious communities that placed moral limits on financial activity.

In the 18th century, Quaker communities in Philadelphia began taking formal steps against participation in the slave trade. Other faith traditions developed similar approaches, including Methodist teachings that emphasized not earning or using money in ways that harmed others. These early frameworks weren't called sustainable investing, and they certainly didn't have the data tools or institutional language we use today, but they reflected the same basic idea: financial decisions should be examined through an ethical lens.

At the time, this wasn't about branding or investment product design. It was about conscience. It was about asking whether wealth could be separated from the way it was earned, held, or invested. For these communities, the answer was increasingly clear: money carried responsibility.

That belief became the foundation for what investors would later call exclusionary screening, the practice of avoiding companies and industries that conflict with an investor's values. It's one of the simplest ideas in values-based investing, and also one of the most enduring. If an investment supports something you believe causes harm, you can choose not to own it.

From "Sin Stocks" to Socially Responsible Investing

By the early-to-mid 20th century, values-based investing was often discussed through the lens of "sin stocks," a term for companies in industries such as tobacco, alcohol, gambling, and weapons that some investors considered harmful or inconsistent with their beliefs.

For much of the 20th century, socially responsible investing was less about broad ESG analysis and more about these kinds of exclusions. The question wasn't yet, "How well does this company manage environmental risk?" or "What does its governance structure look like?" It was much more direct: "Do I want to profit from this industry?"

For many investors, the answer was no.

The Pioneer Fund, launched in 1928, is often cited as one of the first formally organized socially responsible investment funds in the United States. It screened out tobacco, alcohol, and gambling, bringing principles that religious communities had practiced for generations into a more formal, professionally managed format.

That screening mindset is still part of sustainable investing today. Many investors want to know whether their portfolios include tobacco companies, fossil fuel producers, weapons manufacturers, or other industries they would rather avoid. Modern sustainable investing has become more nuanced and data-driven, but the underlying instinct is familiar: people want to understand what they own, and they want the ability to make choices that reflect their values.

How Divestment Became a Tool for Social Change

Over time, divestment became a way for investors and institutions to respond to major social and political issues, extending the logic of exclusionary screening from individual industries to larger systems of harm.

Tobacco and Institutional Integrity

The tobacco industry became one of the clearest examples of why values-based investing mattered, especially for medical institutions.

Hospitals, medical schools, physicians, and health organizations exist to improve health, prevent disease, and care for patients. Yet in some cases, their investment portfolios still held tobacco stocks. That tension between mission and money became harder and harder to justify.

This was an important shift, because it showed that divestment wasn't only about personal belief or religious tradition. It could also be about institutional integrity. For a medical organization, investing in tobacco wasn't just a financial question. It was a mission question, and a contradiction that couldn't simply be explained away by portfolio performance.

The Anti-War Movement

During the 1960s, university students and faculty challenged endowment investments connected to defense contractors and the Vietnam War. They asked whether the institutions they belonged to should be profiting from a conflict so many of them opposed.

The Anti-Apartheid Movement

In the 1980s, a global campaign pressured corporations, universities, and governments to divest from companies doing business with South Africa's apartheid regime. It became one of the most widely recognized examples of investors using their capital to take a stand.

Fossil Fuel Divestment Today

The same question appears today in fossil fuel divestment efforts, as individuals and institutions seek to remove coal, oil, and gas holdings from their portfolios.

Each movement was different. Each had its own context, its own urgency, and its own limitations. But they shared a common belief: investors don't have to be passive owners of capital. A portfolio can reflect priorities. It can avoid harm. It can seek better outcomes. It can be managed with intention.

That doesn't mean every investment decision is simple, or that every portfolio will be perfect. Sustainable investing often requires tradeoffs, research, and a willingness to look more closely at what's actually inside a fund. But it begins with the belief that looking closely is worth doing.

What Does ESG Stand For and How Did the Framework Develop?

ESG stands for Environmental, Social, and Governance, three categories of factors used to evaluate companies and investment decisions beyond traditional financial metrics alone.

In the early 2000s, sustainable investing began to take on a more formal, institutional structure. The term ESG was introduced through the 2004 United Nations Global Compact report Who Cares Wins, which brought together major financial institutions to develop guidelines for integrating environmental, social, and governance considerations into investment analysis.

That report helped move sustainable investing from the margins into mainstream finance by giving the field a shared vocabulary. Instead of focusing only on what to avoid, investors could begin evaluating how companies manage risks and opportunities related to climate, labor practices, governance, transparency, supply chains, and long-term resilience.

That distinction matters. ESG didn't replace values-based investing. It expanded it.

Earlier approaches centered on exclusions: avoiding tobacco, alcohol, gambling, weapons, apartheid-linked companies, or fossil fuels. ESG added another layer by asking how companies operate, how they manage risk, how accountable they are to stakeholders, and whether their business practices are sustainable over time.

In that sense, ESG gave a more formal language to ideas that had been evolving for centuries. The tools have changed, but the underlying question has stayed the same: how can money be managed in a way that reflects both financial goals and personal or institutional values?

What Does Sustainable Investing Look Like Today?

Today, sustainable investing encompasses many approaches, and the field continues to evolve. Many investors use a combination of them, because values-based investing is rarely one-size-fits-all.

Exclusionary screening. Avoiding specific industries or business practices that conflict with an investor's values, the direct descendant of faith-based limits and sin-stock screens.

Fossil-free portfolios and climate transition strategies. Removing coal, oil, and gas producers from a portfolio, or favoring companies positioned for a lower-carbon economy.

Shareholder advocacy. Using ownership to vote on resolutions, engage company leadership, and push for better disclosure and more responsible business practices.

ESG integration. Evaluating how companies manage environmental, social, and governance risks as part of the broader investment process.

The common thread is intentionality. Sustainable investing asks investors to look beneath the surface of a portfolio. What companies are owned? What industries are included? What risks are being taken? What values are being expressed?

These aren't always easy questions to answer, especially if you hold mutual funds, ETFs, retirement accounts, or a legacy portfolio built years ago by an advisor who never discussed ESG at all. But that transparency matters. It helps you understand not only how your money is invested, but what it's helping to finance.

For many people, that realization is both empowering and uncomfortable. Empowering, because once you understand what you own, you can make more informed decisions. Uncomfortable, because you may discover your portfolio has been supporting industries that don't align with the way you see the world. That's part of the process. Sustainable investing isn't about achieving perfection overnight. It's about becoming more aware, asking better questions, and making more intentional choices over time.

Curious what your current portfolio supports?

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.

Blue Marble's Place in This Story

At Blue Marble, sustainable investing isn't a new product line, a marketing trend, or something we added because the rest of the industry finally started paying attention. It's the work we've been doing for more than 25 years.

Long before ESG became part of the mainstream financial conversation, we were helping clients build portfolios that reflected both their long-term goals and their values. We believed then, as we do now, that investors shouldn't have to choose between thoughtful financial advice and a portfolio they can feel good about owning. Sustainable investing was never a constraint to us. It was, and still is, an opportunity to invest with greater purpose, greater transparency, and greater care for the world we all share.

Our small community of sustainable investors has grown into a global shareholder movement, and we're proud to have been part of that movement from the beginning. Whether you're opening your first investment account, rethinking a legacy portfolio, or aligning an institution's assets with its mission, our goal is to make sustainable investing more accessible, more understandable, and more actionable. Investing with intention shouldn't feel out of reach. It should feel like a natural extension of what you already value.

FAQs

• When did sustainable investing begin?

  The practice of aligning money with values goes back centuries. In the 18th century, Quaker communities in Philadelphia took formal steps against participation in the slave trade, and other faith traditions set similar moral limits on how money should be earned and used.

  The Pioneer Fund, launched in 1928, is often cited as one of the first formally organized socially responsible investment funds in the United States. The term ESG came much later, through the 2004 United Nations Global Compact report Who Cares Wins.

• What is the difference between exclusionary screening and ESG investing?

  Exclusionary screening focuses on what to avoid. It removes companies or industries, such as tobacco, weapons, or fossil fuels, that conflict with an investor's values.

  ESG investing is broader. It also evaluates how companies operate, including how they manage environmental risks, treat employees and communities, and govern themselves.

  Many sustainable portfolios, including ours, use both.

• Is divestment the only way to invest sustainably?

  No.

  Divestment has played an important role in movements from anti-apartheid campaigns to fossil fuel divestment, but it is one tool among several.

  Shareholder advocacy, community investment, and ESG integration all offer other ways to put your values to work. Staying invested and using that ownership to push for better practices can sometimes help move companies in a better direction over time.

Looking Backward to Move Forward

The history of sustainable investing isn't the story of one moment, one movement, or one acronym. It's a long, evolving thread of people and institutions asking what their money should support.

It's Quaker communities recognizing that financial participation carried moral weight. It's the rise of sin-stock screening and the decision not to profit from tobacco, alcohol, gambling, or weapons. It's medical institutions confronting the contradiction of investing in tobacco while working to protect public health. It's students, universities, and pension funds using divestment to respond to war, apartheid, and climate change. And it's today's investors asking what ESG really means, not as a buzzword, but as a framework for building portfolios with greater transparency and intention.

What connects all of these moments is the same fundamental insight: the way we invest says something about what we value.

That doesn't mean every investment will be perfect, or that every investor will define sustainability the same way. But it does mean financial choices aren't separate from the rest of our lives. They're part of how we participate in the world, how we plan for the future, and how we decide what kind of economy we want to help build.

This work isn't new. It's rooted. And for investors who want their portfolios to reflect both their financial goals and their values, it may be more relevant now than ever.

If you're curious what that history could look like in your own portfolio, we'd be glad to sit down and explore it together.

Sources:

• A Brief History of ESG: From Pioneer to Mainstream, The Corporate Governance Institute

• A Short History of Responsible Investing, Corporate Knights (2021)

• Future Proof? Embedding Environmental, Social and Governance Issues in Investment Markets: Outcomes of the Who Cares Wins Initiative, 2004–2008, UN Global Compact and International Finance Corporation (2009)

• A Living Tension: Quaker Values and Money, Friends Journal

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.*