Ethical ETFs Reshape Investing Landscape Amid Hidden Risks
The rise of ethical investing, driven by ESG and SRI principles, is transforming capital allocation strategies. Once limited to religious prohibitions against 'sin stocks,' the movement now employs sophisticated frameworks evaluating climate policies, labor practices, and governance structures.
Ethical ETFs have emerged as a scalable solution, offering retail and institutional investors exposure to vetted companies while maintaining passive investing efficiency. Yet these funds carry structural risks—from concentrated sector exposures to liquidity constraints—that demand specialized risk management.
The market faces a paradox: demand for values-aligned investments grows just as regulators scrutinize 'greenwashing.' Meanwhile, crypto assets like BTC and ETH show increasing correlation with traditional ESG assets, suggesting convergence between digital and ethical finance.
