Best ESG and Impact Investing Apps

The IMPACT app is a powerful platform designed and backed by Interactive Brokers, a trusted name in the financial industry. It helps investors align their values with their investment choices with a core focus on ESG factors allowing users to invest in companies that prioritize sustainability and social responsibility. It categorizes values into 13 key areas, including Ocean Life, Land Health, Gender Equality, Racial Equality, and more.

The app stands out for its wide range of investment options with the ability to filter out companies engaged in harmful practices. You can choose from stocks, ETFs, mutual funds, options, cryptocurrencies (only available to US customers), and even carbon offsets.

IMPACT is a cost-effective investment platform offering commission-free trades for US users. However, for non-US users, the fees applied are relatively low, with rates of up to USD 0.0035 per share (minimum USD 0.35) for stocks and ETFs. Additionally, it charges a fee of 1.00% of the offset value for Carbon Offsets, providing investors with an opportunity to align their investments with their sustainability goals.

Navigating the app is intuitive, especially for those familiar with Interactive Brokers’ other applications. One notable feature is the inclusion of an Impact score, which assesses the sustainability of each investment position. You can also delve into performance details, analyze the impact lens of your positions, and create personalized watchlists to monitor your preferred companies. Another advantageous feature is the ability to easily swap a position that does not align with your responsible investing values for one that aligns with your sustainability objectives. This flexibility empowers you to manage your portfolio based on your values and objectives actively.

We encourage you to check our comprehensive IMPACT review for more insights.

M1 Finance is a popular fintech company known for its automated, commission-free investing portfolios. It combines do-it-yourself (DIY) investing with automated portfolio management. It also offers other financial services like investing, borrowing, and banking services, making it an ideal platform for investors looking to manage all their finances in one place.

One of the key features of M1 Finance is its customizable investment portfolios, known as “Pies.” You can create your Pies by selecting individual stocks, ETFs, and other investment assets and assigning specific weightings to each holding. This allows you to customize your portfolio to your preferences and values, whether it’s focusing on a specific sector, asset class, or investment theme or avoiding certain sectors and companies altogether.

Another feature of M1 Finance is their pre-built pie portfolios designed by financial experts that cover a range of investment strategies, including ESG-focused portfolios. This feature proves invaluable for investors who may need more time or expertise to construct their portfolios from scratch.

M1 Finance caters to various types of investors, offering a comprehensive selection of account types such as individual taxable accounts, joint accounts, retirement accounts (Traditional and Roth IRAs), and trust accounts. Therefore, you can select the account structure that aligns best with your financial goals and tax considerations.

In terms of fees, M1 Finance offers commission-free trading so you can build your portfolio without worrying about transaction costs. Additionally, you can subscribe to their premium service, M1 Plus, to unlock additional benefits, including higher interest rates on cash balances, cashback rewards on debit card purchases, and access to a credit line.

Not a US resident? Here are our M1 Finance alternatives.

Founded in 2008, Betterment is another leading investment platform that prioritises responsible investing. As one of the largest Robo-advisors in terms of Assets Under Management (AUM), Betterment stands as a key player in the industry. It offers socially responsible investing portfolios and provides additional features like cash management and financial planning tools, making it a comprehensive platform for investors seeking to align their investments with their values.

Betterment promotes Socially Responsible Investing (SRI) by offering impact-focused SRI portfolios designed for investors looking to align their investments with their values. These portfolios include Broad Impact, Climate Impact, and Social Impact, each tailored to different sustainability criteria. The portfolios incorporate low-cost ETFs that prioritize companies with strong ESG practices, diversification, and cost considerations.

Betterment caters to investors of all types with its diverse offerings. For those seeking a more affordable solution, Betterment Digital is available with a management fee of just 0.25% of AUM and the option to access financial advisors for an additional fee. Alternatively, for individuals desiring a premium experience, Betterment Premium offers unlimited access to certified financial planners, tailored financial planning, and portfolio management for an annual fee of 0.40% and a minimum balance requirement of $100,000.

Founded in 2014, Ellevest is a digital wealth management company that provides a range of wealth management services, including automated investing, financial planning and private wealth management. While accessible to anyone, Ellevest places a special emphasis on serving women. 

Ellevest constructs its portfolios using a women-first approach, considering the unique needs of women when it comes to investing. They use a combination of ETFs and mutual funds, encompassing various asset classes. The allocation within the portfolio is tailored to your risk tolerance, financial situation, and investment objectives. 

When it comes to socially responsible investing, Ellevest presents the Ellevest Impact Portfolio, a personalized investment solution designed to create a positive societal impact while being managed automatically. It specifically addresses the needs of women and effectively manages risks. What sets it apart is that over 50% of the portfolio is invested in ESG-focused ETFs and mutual funds that prioritize gender considerations, contributing to the advancement of women.

Ellevest’s basic plan is priced at $12 per month, offering up to five goal-specific accounts and portfolios tailored to your financial objectives. It includes retirement planning, tax minimization strategies, and automatic rebalancing. Furthermore, subscribers of this plan receive an exclusive discount on one-on-one financial guidance. Ellevest also provides wealth management options with personalized financial planning and dedicated investment management, available at an additional cost.

Wealthfront is a well-known US-based robo-advisor founded in 2008, providing personalized investment portfolios, brokerage and cash management services. Following a short questionnaire, Wealthfront provides personalized investment portfolio recommendations based on your risk profile and financial goals. Notably, it offers a range of products, including cash management with a competitive APY, automated investing for retirement and education savings, and borrowing against your portfolio.

Wealthfront offers portfolios that prioritise sustainability, diversity, and equity as part of its socially responsible investing strategies. You just open an “Automated Investing Account”, and you will get access to their socially responsible portfolios. Wealthfront employs a robust screening strategy that selects funds that exclude businesses involved in civilian firearms, controversial weapons, tobacco, thermal coal, and oil sands. 

Furthermore, they emphasize investments in companies that excel in Environmental, Social, and Governance measures. Additionally, they manage the portfolio automatically by rebalancing investments and employing tax-loss harvesting when needed to optimize your tax obligations.

For those who prefer a hands-on approach, Wealthfront also offers a “Stock Investing Account,” where you can invest in individual stocks that align with your values. Wealthfront provides a user-friendly platform with fractional shares investing ability, no commission trades, and a low minimum investment of just $1 for self-directed portfolios and $500 for pre-built portfolios.

Founded in 2014, Wealthsimple is a leading Canadian wealth management firm that offers a comprehensive suite of financial services, including investing, saving, and trading. It is known for its user-friendly interface and commitment to innovation and has gained recognition for democratizing investing and making it accessible to a wider audience. It has become popular among Canadian investors seeking to effectively manage their wealth and take advantage of innovative financial solutions.

Wealthsimple offers the opportunity to construct socially responsible portfolios that prioritise sustainable and ethical practices. These portfolios adhere to the most stringent sustainability standards, aligning with the temperature-change goals outlined in the IEA Sustainable Development Scenario and the Paris Agreement. To ensure responsible investment, Wealthsimple screens out industries involved in fossil fuels, tobacco, and weapons, while also excluding the top 25% carbon-emitters in each sector to ensure responsible investment. Furthermore, they emphasize gender diversity on company boards as part of their commitment to social responsibility.

Wealthsimple also offers a self-directed investing option, allowing you to select and manage your investments personally. With this option, you can invest in fractional shares and enjoy the convenience of automatic dividend reinvestment. 

Wealthsimple is only available in Canada, and you can start investing with as little as $1. The platform charges a management fee based on your assets under management, starting at 0.5%, decreasing to 0.4% once your assets reach $100,000, and can reach 0.2% for amounts higher than $500,000.

Established in 2007, eToro is a leading social trading and investment platform that goes beyond traditional offerings. It provides investors ESG scores for over 3,000 assets, utilizing a user-friendly “traffic light” colour scheme. The green score indicates leadership in ESG within its sector, while amber signifies an average rating, and red suggests a poor ESG rating compared to peers.

These ESG scores on the eToro platform are regularly updated to reflect the latest market news and company-reported information. You can have various approaches to integrating ESG scores into your decision-making process. For instance, you can use these scores to gain additional insights into companies beyond financial analysis, apply them as a filtering mechanism for portfolio selection (preferring high-scoring companies or excluding lower-scoring ones), or leverage them as flags for monitoring purposes (investigating changes in ESG scores as potential signals).

eToro also allows investors to invest in ESG smart portfolios that focus on themes such as renewable energy and female leadership. Additionally, it provides a unique feature that allows you to copy the investment strategies of successful investors who prioritize companies making a positive impact on society and have demonstrated a commitment to responsible investing.

The minimum deposit on eToro varies depending on your country (starts at $10). Additionally, eToro offers the opportunity to invest in non-leveraged positions without incurring fees. For more detailed information and insights about eToro, I recommend checking out our comprehensive eToro review.

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.