Key Points
- Values-aligned investing is an approach that builds environmental, social, and governance (ESG) considerations into how a portfolio is constructed and managed. It lets you direct your money toward companies whose practices reflect the societal values that matter to you.
- Abacus applies four firm-wide minimum values criteria to the portfolios we manage. They focus on reducing exposure to greenhouse gas emissions and avoiding tobacco companies, civilian firearms manufacturers, and private prison operators.
- This approach works through three core actions: investing, divesting, and engaging. We direct more capital toward aligned companies, reduce or eliminate holdings in those that fall short, and use shareholder rights to push for better corporate practices.
- The data shows that you don’t have to sacrifice returns over the long-term in order to invest in a way that aligns with your values. Past performance is not indicative of future results
- At Abacus, values-aligned investing isn’t a specialty service or an optional add-on. It’s built into the foundation of our portfolios, and we’ve been doing this work for 20 years.
If you’ve ever picked one brand over another because of the company’s sustainability practices or how it treats its workers, or given to a cause you cared about, you likely understand the idea behind voting with your dollars. For thoughtful consumers, these choices are deliberate: the brands we support, the food we buy, the causes we give to.
For some, that intentionality doesn’t carry forward to their investments. This can be due to a number of reasons. Sometimes they haven’t considered that their portfolio could be an expression of their values. Other times sustainability information is hard to find or investment choices with their advisory firm are limited. In other cases, the intentionality is there; what’s missing is a clear picture of how it extends into a portfolio.
Values-aligned investing, is an approach that closes this gap. It is also referred to as ESG investing, as environmental, social and governmental criteria are used to evaluate how a company operates beyond its financial results. We’ve been helping clients align their money with their values through investing for the past 20 years, because we don’t think the two belong apart.
At Abacus Wealth Partners, this approach isn’t a specialty service. It’s woven into the foundation of every portfolio we build. We believe that where your money goes matters, and that a well-constructed portfolio can reflect both your financial goals and your societal values. Let’s explore how values-aligned investing works here, the minimum standards we apply across every portfolio and why we chose them, and what the long-term performance data actually shows.
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How Does Values-Aligned Investing Work at Abacus?
Abacus’s investment approach is built on academic research and decades of empirical evidence on the financial side. We build globally diversified portfolios- meaning we invest across industries, geographies, and company sizes– so your money isn’t concentrated in any one corner of the market.
Within that framework, we integrate environmental, social, and governance considerations into the portfolios we manage through a combination of core actions including investing, divesting, and engaging.
This means that we:
- Invest more in companies whose practices align with values we and our clients hold
- Reduce or eliminate holdings in those that fall short
- Engage as shareholders to push for ongoing improvement
While our investment decisions reflect our values, research shows that any single investor is too small relative to the market for buying or selling alone to shift company behavior meaningfully. That’s why shareholder engagement is important. It’s the way we are able to help drive change in corporate behavior.
Taken together, these three actions form the foundation of how we think about values-aligned investing at Abacus. Capital directed with purpose, portfolios built with rigor, and an ongoing relationship connecting client, financial advisor, investment manager, and company. That’s what investing with intention looks like in practice. Of course, investing, divesting, and engaging all depend on a shared definition of what counts as aligned.
At Abacus, that definition starts with four firm-wide criteria.
What Are Abacus’s Minimum Values Criteria?
Abacus has established a set of firm-wide minimum values criteria that apply across recommended offerings for client portfolios. The word “minimum” is intentional. These are the standards that serve as a starting point for every Abacus portfolio. From there, clients have the opportunity to go further, layering in additional values-based preferences that reflect what matters most to them.
We chose to focus on values that are widely agreed upon in the values-aligned investing space as harmful to society. These are areas where the evidence of societal harm is well-documented and broadly recognized.
These criteria require that all investments proposed by the Abacus Investment Department, approved by the Investment Committee, and integrated into client’s portfolios attempt to meet the following standards:
- Focus on reducing Greenhouse Gas Emissions: Climate change, driven largely by greenhouse gas emissions from human activity, is one of the most significant systemic risks facing society. Its consequences– more frequent and severe weather events, prolonged droughts, rising sea levels, and growing threats to public health– are already reshaping economies, displacing communities, and straining vital resources around the world.
- Divest from Tobacco Companies: The societal harm of tobacco is broad and well-documented, touching public health and social equity, with tobacco companies historically targeting vulnerable populations like youth and lower-income communities.
- Divest from Civilian Firearms Manufacturers: The civilian firearm manufacturing industry has a documented history of funding lobbying efforts against safety regulations like universal background checks, while increased production and sale of firearms without stricter oversight heightens the risk of gun-related injuries and fatalities.
- Divest from Private Prison Operators: The private prison industry’s profit-driven model creates a direct financial incentive to maximize and grow incarceration rates. This creates a misalignment between private profit and the public interest in a just, effective justice system.
While these aren’t the only societal values that we hold as a firm, these are the ones that we can reasonably implement across portfolios. Since we’ve been in the values-aligned investing space for the past 20 years, we’ve seen its evolution to this place, and expect it to continue to evolve in a way that allows us to add to this list over time as the world and values-aligned investor preferences progress.
Understanding what we screen for in our portfolios and why is one part of the picture. The other part, the one investors often want answered before anything else, is what this means for returns.
Does Values-Aligned Investing Mean Sacrificing Returns?
Many investors want to know if investing along with your societal values is bad for returns, or if ESG funds perform comparably to traditional funds. The short answer is that the data shows that values-aligned investing doesn’t have to mean sacrificing returns. To understand the full picture, let’s take a step back and look at what the data shows over time.
Figure one compares the MSCI ACWI Selection Index, which screens companies based on ESG criteria, against the MSCI ACWI Index, the broad global benchmark without values-alignment considerations incorporated, showing the growth of $100 invested in September 2007 through December 2025.
Source: MSCI. Growth of $100, net returns in USD. Sep 28, 2007 to Dec 31, 2025. Past performance is not indicative of future results.
Over this period, you can see how the ESG-screened index and the broad market index delivered comparable long-term returns with nearly identical volatility. That second point is worth pausing on, since it means the ESG screen didn’t add meaningful risk over this period. There will always be shorter-term periods where the two diverge, as any two portfolios with different holdings will behave differently quarter to quarter or year to year. But the long-term evidence suggests that you don’t have to choose between societal values and your financial goals, particularly when portfolios are built in a financially rigorous way.
The criteria, the engagement work, and the long-term performance data all point in the same direction. Doing right by the world and doing right by your financial future don’t have to be in conflict.
You Don’t Have to Choose Between Your Values and Financial Goals
If there’s one thing we hope you take away from all of this, it’s that values-aligned investing can be designed to work with your financial goals, not against them. The evidence suggests the two can go hand in hand, and that’s exactly what we demonstrate for the clients we serve.
If this resonates with you, whether you’re just beginning to explore values-aligned investing or you’ve been thinking about it for a while and want to work with a firm that takes it as seriously as you do, we’d love to have a conversation with you. There’s no pressure. Just an honest, thoughtful discussion about where you want your money to go, and how we can help get it there.
Schedule a conversation to get started, or learn more about how Abacus approaches comprehensive financial planning and values-aligned investment management.
Frequently Asked Questions
At Abacus, values-aligned investing is an approach that integrates environmental, social, and governance (ESG) considerations into how a portfolio is built and managed. Rather than investing purely on financial metrics, it takes into account how companies behave toward the environment, their employees, their communities, and beyond. At Abacus, this isn’t a niche offering. It’s the foundation of how we invest for every client.
The terms are often used interchangeably, but there’s a subtle difference. ESG refers to a lens or a specific set of metrics used to evaluate companies. Values-aligned investing is broader; it’s the philosophy of building a portfolio that reflects what you believe in. ESG is a tool we use to do that.
Based on historical data, not meaningfully. Over the long term, well constructed ESG-screened portfolios have delivered returns comparable to broad market benchmarks, without introducing significant additional risk. Like any investment approach, shorter-term variation is normal. But the evidence does not suggest that investing with your values requires sacrificing your financial goals.
We focus our firm-wide minimum criteria on areas with well-documented, broadly recognized evidence of harm, and where screening is reasonably implementable across portfolios. These criteria include reducing exposure to high greenhouse gas emitters, and excluding tobacco, civilian firearms manufacturers, and private prison operators. They serve as the starting point for every portfolio we manage.
Yes. The minimum criteria are a baseline, not a ceiling. Your advisor can help you think through what matters most to you and how to reflect that in your portfolio. That conversation is different for every client.
