How to invest money responsibly and make a difference

Investing is no longer seen as the preserve of the wealthy. Whilst the traditional savings account has not quite had its day yet, younger generations are increasingly being encouraged to put their money to work. The financial sector has long since recognised the demand for ethical investment as a market segment: ESG funds, impact labels, green ETFs – a seemingly abundant range of options. Yet what these products promise and what they actually deliver are not always compatible. Over 350 funds had to relinquish their sustainability labels in 2022 after EU regulations clarified what such labels must actually entail. Meanwhile, the definition of what counts as 'sustainable' is changing at a pace that even experts find difficult to keep up with. The EU has classified natural gas and nuclear power as transitional technologies. In early 2026, the European Commission officially recognised armaments as a form of social sustainability in a memo.

Julian Bernstein is the coordinator of the non-profit organisation etika (Initiativ fir Alternativ Finanzéirung), which has been working with alternative savings and credit mechanisms in Luxembourg since 1996.

Lëtzebuerger Journal: The term 'ethical investing' is used today in very different contexts – ranging from an ETF with a few exclusion criteria to a direct loan to organic farmers. How would you define the term for someone who is considering investing money in line with their values for the first time?

Julian Bernstein: I cannot provide a general definition, and that is precisely the problem. A great many things fall under the 'ethical' label. There are simply different, competing approaches. etika’s approach differs significantly from simple exclusion criteria such as 'best in class'.

Our approach is based on additionality – that we can generate added value and really look at what has an impact on the real economy. If there is a positive impact, that meets our criteria.

Does etika have a minimum threshold below which an investment is not classified as ethical?

There must be either social or environmental added value. It is difficult for us to quantify this in numerical terms because we are not a fund that stipulates that 70 per cent of the portfolio must be in a specific sector to be considered ethical. What is central to us, however, is this: there must be no harmful activities involved – in other words, the 'Do No Significant Harm' principle. We discuss this with every project, and we have already rejected projects that looked good at first glance but did not align with our core values.