Best Robo Advisors for Socially Responsible Investing: A Comprehensive Comparison

By Alexander

Mar 13, 2025

In Investing

0

Are you passionate about making a positive impact on the world while growing your wealth? Socially responsible investing (SRI), also known as ESG (Environmental, Social, and Governance) investing, allows you to align your investments with your values. But navigating the world of SRI can be complex. Luckily, robo advisors offer a convenient and accessible way to invest responsibly. This article provides a comprehensive comparison to help you find the best robo advisor for socially responsible investing.

What is Socially Responsible Investing (SRI)?

Socially Responsible Investing (SRI) is an investment strategy that considers both financial return and positive social impact. It involves choosing companies and funds that align with your ethical values. This can include avoiding investments in industries like fossil fuels, tobacco, or weapons, and instead focusing on companies with strong environmental practices, fair labor standards, and ethical governance.

Why Choose a Robo Advisor for SRI?

Robo advisors are automated investment platforms that use algorithms to build and manage your portfolio. They offer several advantages for SRI investors:

• Accessibility: Robo advisors typically have low minimum investment requirements, making SRI accessible to a wider range of investors.
• Diversification: They automatically diversify your portfolio across different asset classes, reducing risk.
• Low Fees: Robo advisor fees are generally lower than those charged by traditional financial advisors.
• Customization: Many robo advisors allow you to customize your portfolio to align with your specific values.
• Convenience: They handle all the investment management tasks, freeing up your time.

Key Factors to Consider When Comparing Robo Advisors for Socially Responsible Investing

When you compare robo advisors for socially responsible investing, several factors should influence your decision:

• SRI Focus and Options: Does the robo advisor offer dedicated SRI portfolios or allow you to screen investments based on your values? What specific ESG factors are considered?
• Investment Options: What types of SRI investments are available (e.g., ETFs, mutual funds)? Are there options for impact investing or thematic investing?
• Fees: What are the advisory fees, expense ratios of the underlying investments, and any other associated costs?
• Minimum Investment: What is the minimum amount required to open an account and start investing?
• Customization: How much control do you have over your portfolio's composition? Can you exclude specific companies or industries?
• Tax Efficiency: Does the robo advisor offer tax-loss harvesting or other strategies to minimize taxes?
• Account Types: What types of accounts are supported (e.g., taxable accounts, Roth IRAs, traditional IRAs)?
• Customer Support: What level of customer support is available (e.g., phone, email, chat)?

Top Robo Advisors for Socially Responsible Investing: A Detailed Comparison

Here's a comparison of some of the leading robo advisors offering SRI options:

1. EarthFolio

EarthFolio is a dedicated SRI robo advisor that builds portfolios using socially responsible ETFs. They focus on environmental sustainability and social justice. EarthFolio offers several pre-built SRI portfolios, and you can also customize your portfolio to align with your specific values. Their advisory fees are competitive, and they offer tax-loss harvesting.

• SRI Focus: Strong focus on environmental sustainability and social justice.
• Investment Options: Primarily uses SRI ETFs.
• Fees: 0.50% advisory fee.
• Minimum Investment: $250

2. OpenInvest

OpenInvest is a unique robo advisor that allows you to fully customize your portfolio based on your values. You can choose from a wide range of social and environmental criteria, such as climate change, gender equality, and animal welfare. OpenInvest also offers shareholder advocacy, allowing you to vote on shareholder proposals that align with your values. Their fees are higher than some other robo advisors, but their level of customization is unmatched.

• SRI Focus: Highly customizable, allows you to align your investments with a wide range of values.
• Investment Options: Primarily uses individual stocks and bonds.
• Fees: Starts at 0.50% advisory fee.
• Minimum Investment: $3,000

3. Swell Investing

Note: Swell Investing is no longer operating as a robo-advisor.

4. Betterment

Betterment is a popular robo advisor that offers a socially responsible investing option called the