The Best Robo-Advisors for ESG Investing

Managing your investments, especially if you want to invest sustainably, is hard work. Thankfully, there is a new breed of online advisors and apps that can automate this process.  

SustainFi Updated July 18, 2021

esg investing roboadvisor

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We’ve compiled the definitive list of robo-advisors with ESG options to help you choose the right one.

The top robo-advisors for sustainable investing

Fees

$0 ($125 for M1 Plus)

Minimum

$100

Best For

Self-directed investors

No management fee

Highlights

Socailly Responsible Investing Pies

Fees

0.49% - 0.89%

Minimum

$100,000

Best For

Access to personal advisors

Highlights

Socially Responsible Personal Strategy

Fees

0.25% - 0.40%

Minimum

Digital: $0

Premium: $100,000

Best For

Choice of impact portfolios

Highlights

Broad, Climate, and Social Impact Portfolios

Fees

$3-$5

/month

Minimum

$5

Best For

Beginners and investors who struggle to save

Highlights

Acorns Sustainable Portfolio

Fees

0%-0.30%

Minimum

$100

Best For

One-stop-shop including banking

Highlights

Socially Responsible Portfolio

What is ESG investing?

Environmental, social, and governance (ESG) investing adds factors like greenhouse gas emissions, employee treatment, and governance to the investment process. ESG investing is also known as sustainable, socially responsible, and impact investing. Studies show that ESG investing can help you align your financial goals with your values and get better returns. 

What are robo-advisors?

Robo-advisors are online financial advisors that build and maintain your investments based on how much risk you’re willing to take, what returns you want, and how soon you need the money. Many robo-advisors also offer advanced features like portfolio rebalancing, tax-loss harvesting, and goal-based financial tools.

Robo-advisors use Modern Portfolio Theory and computer algorithms to create portfolios based on your profile. Instead of sitting down with a human financial advisor, you answer an online questionnaire about your goals, obligations, and how much risk you’re willing to take. Their software then suggests suitable investments for you. The robo-advisor invests once you fund your account online.

Human financial advisors often put together portfolios made of expensive mutual funds. Most mutual funds never beat the market, but they charge high fees regardless. Personal advisors also charge for their services.

Although many robo-advisors let you talk to personal advisors for a separate fee, their goal is to lower costs by automating the investment process and reducing human input. Instead of picking individual stocks and bonds to beat the market, most robo-advisors invest in low-cost, tax-efficient exchange-traded funds (ETFs). As a result, the cost of your investments is lower.

Betterment launched the first robo-advisor in 2010 and was quickly followed by others, including Wealthfront, Personal Capital, and Ellevest. Since then, many robo-advisors have added ESG investing strategies.

Are robo-advisors right for you?

Robo-advisors are a great option if you are:

  • Starting with a low minimum investment

The investment you need to start is frequently $0 to $100. In contrast, many personal advisors require a $250,000 minimum investment.

  • Looking for a low-cost alternative to human advisors

Robo-advisors typically charge 0.25%-0.50% of your investments annually ($25-50 on a $10,000 investment). The management fee is in addition to the cost of the funds they buy, which adds another 0.15% to 0.30%. Plus, with a robo-advisor, there are usually no transaction fees or commissions to buy or sell investments.

Human financial advisors are much more expensive. It is not unusual to pay 1% of assets to the advisor plus 1% for the mutual funds they recommend.

Because of compound interest, these expenses add up over time. Consider a 35-year-old with a $100,000 retirement account that earns 5% a year. If they pay a robo-advisor to manage their investments, their all-annual fee is 0.50%. They would then have $375,000 at age 65 (assuming no additional contributions to the retirement account).

If they work with a typical human advisor who invests their money in mutual funds, their fees add up to 2% annually. As a result, they will only have $243,000 at age 65. The 1.5% difference in fees between a robo-advisor and a human financial advisor adds up to $132,000 over thirty years.

  • Looking to “set and forget it”

In addition to telling you how to invest, robo-advisors will automatically rebalance the original asset allocation. The rebalancing requires selling assets that have done well and buying those that haven’t to maintain the right ratio between different types of investments.  Human investors are bad at selling winners and buying losers, so it may be a good idea to outsource this to an algorithm.

When not to use a robo-advisor

Robo-advisors are a great option if you want basic investment allocation services. But there is still a place for human advisors.

You should not use a basic robo-advisor service if you need:

  • Comprehensive financial, estate, or tax planning advice
  • A strategy adjusted for business or stock option ownership
  • Advice tailored to specific life events or needs such as a special needs child
  • Regular portfolio updates from a personal financial advisor

Some robo-advisors do provide personal advisors for an extra fee. Personal Capital even combines traditional financial advisors with a robo-advisor.

🔔 Learn how to find a socially responsible human financial advisor or see the list of the top 50 ESG advisors.

What are the best robo-advisors for ESG investing?

The Best Socially Responsible Robo-Advisors for 2021

Fees

$0 ($125 for M1 Plus)

Minimum

$100

Best For

Self-directed investors

No management fee

Highlights

Socailly Responsible Investing Pies

Fees

0.49% - 0.89%

Minimum

$100,000

Best For

Access to personal advisors

Highlights

Socially Responsible Personal Strategy

Fees

0.25% - 0.40%

Minimum

Digital: $0

Premium: $100,000

Best For

Choice of impact portfolios

Highlights

Broad, Climate, and Social Impact Portfolios

Fees

$3-$5

/month

Minimum

$5

Best For

Beginners and investors who struggle to save

Highlights

Acorns Sustainable Portfolio

Fees

0%-0.30%

Minimum

$100

Best For

One-stop-shop including banking

Highlights

Socially Responsible Portfolio

The robo-advisors with ESG options include Betterment, Personal Capital, Acorns, M1 Finance, Ellevest, and Marcus Invest. Their algorithms build portfolios from low-cost ETFs but replacing conventional funds with ESG funds. ESG-focused robo-advisor EarthFolio is an exception, investing in a few actively managed mutual funds. Apps like Newday and Public also let you invest in thematic collections of ESG stocks.

Despite the growth in ESG investing, many robo-advisors like Schwab Intelligent Portfolios and Vanguard Digital Advisor still don’t have ESG options.

Robo-advisor management fees are the same for traditional and ESG portfolios, but the expense ratio of the funds they own is higher for ESG strategies.

For example, Betterment’s Broad Impact portfolio costs 0.13%-0.18% versus 0.05%-0.16% for the traditional portfolio. The management fee Betterment charges – 0.25% – is the same for ESG and conventional portfolios.

Slightly higher ESG fund expenses have not been a big deal because ESG funds have outperformed. A February 2021 report from Backend Benchmarking, which analyzes robo-advisor performance, found that seven out of eight ESG portfolios they reviewed outperformed their traditional counterparts.

Compare robo-advisor ESG portfolios

Robo-AdvisorSustainFi Rating Management FeeFund Expense RatioAll-In Cost Account MinimumPortfolio in ESG FundsStock Portfolio in EnergyMSCI ESG Score Sustainalytics Score
Betterment Broad Impact 4.50.25%0.16%0.41%$072%6.4%7.33.4
Betterment Climate Impact 4.50.25%0.19%0.44%$082%4.4%6.23.0
Betterment Social Impact 4.50.25%0.18%0.43%$073%6.0%6.93.5
M1 Finance International Responsible Investing Pie4.50%0.39%0.39%$100100%4.3%7.84.8
M1 Finance Responsible Investing Pie4.50%0.38%0.38%$100100%4.2%7.94.4
Acorns Sustainable4.40.14%0.16%0.31%$087%6.3%7.33.8
Ally Invest Socially Responsible Portfolio4.20.30%0.15%0.45%$10078%6.1%7.23.6
EarthFolio Core4.00.50%0.28%0.78%$25,000100%2.3%7.44.3
EarthFolio Fossil Free4.00.50%0.60%1.10%$25,000100%0.3%7.34.8
Ellevest Impact 3.80.22%0.17%0.39%$044%6.0%6.83.2
Marcus Invest Impact 3.80.35%0.17%0.52%$1,00068%5.9%7.23.7
E*TRADE Socially Responsible
3.80.30%0.16%0.46%$50056%6.1%7.03.7

Data as of 6/30/2021. Assuming a portfolio that is ~70-80% invested in equities and ~20-30% in bonds. There wasn’t enough portfolio-level data to compare Personal Capital, Sustainfolio, and Newday Impact. For Ellevest and Acorns, the management fee assumes a flat fee of $54/year for Ellevest and $36/year for Acorns and a $25,000 investment.

Robo-advisor reviews

Acorns Sustainable Portfolio

SustainFi Rating:4.4 / 5
Account minimum• $0
• $5 to start investing
Management fee$3 or $5/month
ESG optionESG Portfolio
Investment expense ratio (ESG portfolios)0.16% for the Moderately Aggressive Sustainable Portfolio
Accounts supported• Individual and joint taxable investment accounts
• Traditional, Roth, and SEP IRAs
• Custodial investment accounts
• 401k rollovers
Human advisorsNo
Tax-loss harvestingNo
Automatic rebalancingYes
FeaturesSave your change, bank accounts, earn money with Acorns partners
Best forBest for beginners, investors struggling to save

Acorns is a personal finance app that lets you invest spare change from everyday purchases in diversified portfolios made up of exchange-traded funds (ETFs). The app was launched in 2014 to make investing seamless for everybody and has since expanded to retirement and checking accounts. In 2021, Acorns grew to over 9 million sign-ups and nearly $5 billion in assets under management.

Acorns recently started offering Sustainable Portfolios that invest in ESG funds. They are offered in partnership with iShares, the largest provider of low-cost, sustainable ETFs. These portfolios are designed to perform in line with conventional, Core Portfolios.

The funds in the ESG portfolio cost between 0.05% and 0.25%. The blended cost of the Moderately Aggressive Portfolio is 0.16%, which is on the less expensive side.

87% of the Moderately Aggressive Portfolio is invested in various ESG funds, and only a few non-ESG bond funds are included. We think this is a good outcome.

We note that the Sustainable Portfolio is not fossil fuel free, so you will still have some oil and gas stock exposure. However, it does own fewer fossil fuel stocks than the conventional option.

Pros:

  • The app makes you save and invest automatically
  • A good way to start investing for beginners
  • Very low fees for higher balances
  • Solid ESG option that will put your money in cheap sustainable funds
  • One-stop-shop including checking accounts
  • Easy to switch to Sustainable Portfolios
  • Earn money with Acorns partners

Cons:

  • Fees can be high as a percentage of assets for small balances
  • No human advisor option
  • No tax-loss harvesting

💰 Takeaway

Acorns Invest is a great choice for beginners, especially those who are struggling to save. Acorns offers a solid ESG option that is inexpensive and mostly invested in ESG funds.

🔔 Read an in-depth review of Acorns.

Ally Invest Managed Portfolios

SustainFi Rating:4.2 / 5
Account minimum$100
Management fee• 0.30%
• 0% if 30% of the portfolio is in cash
ESG optionsSocially Responsible Managed Portfolio
Investment expense ratio (ESG portfolios)0.15% for the Socially Responsible Growth Portfolio
Accounts supported• Individual and joint investment accounts
• Traditional and Roth IRAs
Human advisorsNo
Tax-loss harvestingNo
Automatic rebalancingYes
Best forOne-stop shop for robo-advisor, trading, and banking

Ally is a financial services company offering bank accounts, loans, and an online brokerage. They offer both self-directed investing through the brokerage and a robo-advisor, Ally Invest Managed Portfolios.

Ally Invest offers the Socially Responsible Managed Portfolio as the ESG option. The portfolio buys low-cost iShares ETFs for your stock investment. The bond investment comes from conventional funds from iShares and Vanguard.

Ally Invest offers several risk profiles, from moderate to aggressive. The Growth Portfolio in the middle-risk category recommends investing 78% of assets in equities. All equity funds are ESG funds, and the expense ratio is relatively low (0.15% for the Socially Responsible Growth portfolio).

The ETFs Ally Invest picks still invest in fossil fuels. Energy – including utilities – represents around 6% of the Socially Responsible Growth portfolio.

Note: To start, Ally Invest recommends a free portfolio that puts 30% of your assets in cash. You don’t pay any management fee, but the allocation to cash is too high if you are looking to build wealth and not an emergency fund. You need to select the option to invest your entire portfolio in the market if you don’t need extra cash.

Pros:

  • Comprehensive financial services offering (checking and savings accounts, credit cards, online brokerage with technical analysis tools)
  • High allocation to ESG funds in the Socially Responsible portfolio
  • Selection of cheap ESG funds

Cons:

  • Ally Invest puts 30% of your portfolio into cash by default (you can change that). That is too high for nearly all investors (even if it means you don’t pay a management fee)
  • No tax-loss harvesting
  • No human advisors

💰 Takeaway

Ally Invest Managed Portfolios offer a low-cost ESG portfolio that invests a large percentage of assets in ESG funds. It’s a good option, especially if you also use their bank and online brokerage.

🔔 Read an in-depth review of Ally Invest.

Betterment Impact Portfolios

SustainFi Rating:4.5 / 5
Account minimum• Betterment Digital: $0
• Betterment Premium: $100,000
Management fee• Betterment Digital: 0.25%
• Betterment Premium: 0.40%
ESG options3 impact portfolio options (Broad Impact, Climate Impact, and Social Impact). ESG funds replace conventional funds for stocks and some bonds
Investment expense ratio (ESG portfolios)• Broad Impact: 0.13%-0.18%
• Climate Impact: 0.16%-0.22%
• Social Impact: 0.16%-0.20%
Accounts supported• Individual and joint taxable investment accounts
• Traditional, Roth, and SEP IRAs
• Trusts
• High yield savings and checking accounts
• 401k rollovers
Human advisors• Betterment Digital: none, but you can purchase financial planning packages starting at $299
• Betterment Premium: unlimited access to human advisors
Tax-loss harvestingYes
Automatic rebalancingYes
FeaturesCharitable giving tool, RetireGuide retirement planning tool
Best forLow-cost selection of ESG portfolios

Betterment is the first and most successful robo-advisor (if you judge by the assets they manage). They launched the first socially responsible portfolio in 2017, expanding it to three options in 2020.

1. Broad Impact Portfolio

Betterment’s general ESG option includes ESG fund alternatives for U.S. stocks, emerging and developed markets stocks, and, for non-taxable portfolios, U.S. high-quality bonds. Because of fees or trading limitations, the rest of the portfolio (including U.S. bonds for taxable accounts, international bonds, and emerging markets bonds) is still drawn from conventional ETFs. When tax-loss harvesting (a strategy used to save money on taxes) is enabled, Betterment adds conventional ETFs for emerging and developed markets stocks.

Betterment uses large ESG ETFs from iShares (BlackRock), especially the iShares ESG Aware MSCI USA ETF (ESGU). While iShares ETFs own fossil fuel companies, they generally contain less energy than conventional alternatives. They also exclude tobacco, thermal coal, and certain weapons manufacturers.

2. Climate Impact Portfolio

The Climate Impact portfolio emphasizes the “E” or environmental factors in ESG. This portfolio features a low carbon footprint equity ETF (CRBN) and ETFs that divest from fossil fuel reserve owners.

According to Betterment, carbon emissions per dollar of revenue for the 100% stock Climate Impact portfolio are half of those of the conventional (Core) portfolio. The portfolio adds green bonds (bonds that fund environmentally beneficial projects) through a green bond ETF.

Half of the stock component of this portfolio is invested in the iShares MSCI ACWI Low Carbon Target ETF (CRBN). CRBN is an ETF that seeks to include companies with a lower carbon footprint relative to peers. The ETF provider measures the carbon intensity of each stock by tracking the tons of CO2 emissions per million dollars in sales. (Despite lower carbon intensity, CRBN has energy exposure, including oilfield services provider Schlumberger.)

🔔 Learn if low-carbon funds are right for you.

The remaining half of the stock exposure in the Climate Impact Portfolio is invested in fossil fuel reserve-free ETFs (SPYX for U.S. stocks, EFAX for developed markets stocks, and EEMX for emerging markets stocks). (Despite excluding oil and gas companies with reserves, SPYX includes oilfield services and fossil fuel-powered utilities.)

The Climate Impact portfolio invests in green bonds through the iShares Global Green Bond ETF (BGRN).

 Assets invested in fossil fuels (%): Core vs. Climate Impact Portfolios

Asset ClassBetterment Core (non-ESG) PortfolioClimate Impact Portfolio
U.S. equities8.7%5.0%
Developed markets equities8.4%1.7%
Emerging markets equities9.4%3.0%

Data as of 6/30/2021. Source: Fossil Free Funds. Assumes 70% of the portfolio is in stocks.

Because this portfolio is called the Climate Portfolio, you may be surprised that you will still be investing a material amount of cash in fossil fuels. On the positive side, the Climate Portfolio does invest less in energy than the conventional portfolio.

Note: the Climate Impact portfolio doesn’t take into account social or governance factors.

3. Social Impact Portfolio

The Social Impact portfolio is similar to the Broad Impact portfolio, except that it adds two impact funds that promote gender diversity and ethnic and racial inclusion. The funds are SPDR SSGA Gender Diversity Index ETF (SHE) and Impact Shares NAACP Minority Empowerment ETF (NACP). These funds each replace 10% of total U.S. market exposure, making up around 8% of the portfolio that is invested 70% in stocks and 30% in bonds.

SHE is a U.S. Stock ETF that includes companies with greater gender diversity in senior leadership. Companies are ranked according to the ratio of women in senior leadership positions; the leaders in each sector are included.

NACP, a U.S. stock ETF from Impact Shares, uses a scoring methodology from the National Association for the Advancement of Colored People (NAACP). The goal is to provide exposure to companies with strong diversity policies.

Betterment charges the same management fee (0.25%) for traditional and ESG portfolios. However, the funds in the ESG portfolios cost slightly more. For example, the Broad Impact portfolio costs 0.13%-0.18% versus 0.05%-0.16% for the traditional Betterment portfolio. Still, 0.13%-0.18% is low, even if you are not an ESG-focused investor.

Pros:

  • Three sustainable investing options with improved ESG metrics and less energy exposure versus conventional portfolios
  • Multiple accounts supported
  • Multiple features, including tax-loss harvesting
  • Access to human advisors is available for an extra fee or with the Premium membership

Cons:

  • The Climate Portfolio invests in fossil fuels
  • Human advisors are not included in the basic membership
  • No direct indexing. (Direct indexing allows you to exclude certain stocks from your portfolio or to sell losing stocks to get tax breaks)

💰 Takeaway

Betterment is a large, feature-rich robo-advisor. They use cheap ESG funds to build ESG portfolios. These portfolios have better ESG ratings and less energy exposure than conventional portfolios. But there is room for improvement. For example, we hope they offer options with reduced fossil fuel exposure and fossil free options.

🔔 Read an in-depth review of Betterment SRI Portfolios.

EarthFolio

SustainFi Rating: 4.0 / 5
Account minimum$25,000
Management fee0.50%
ESG optionsCore and Fossil Free portfolios are made up of ESG-focused mutual funds and ETFs
Investment expense ratio0.28% for the Core Portfolio, 0.60% for the Fossil Free Portfolio (70% stocks / 30% bonds)
Accounts supported• Individual and joint investment accounts
• Traditional, Roth and SEP IRAs
• Trusts
• 401k rollovers
Human advisorsYes
Tax-loss harvestingNo
Automatic rebalancingYes
Best forInvestors who want to be 100% fossil free and don't mind paying more for it

EarthFolio is the first sustainable robo-advisor, with over $100 million in assets. They don’t offer any non-ESG portfolios, and 100% of your assets will be invested in sustainable funds, including ETFs and mutual funds. Accounts are held at TD Ameritrade.

EarthFolio gives you a choice between the Core and Fossil Free Portfolios. The Fossil Free option completely excludes all fossil fuel stocks, unlike the Climate Portfolio from Betterment, which continues to invest in oil and gas companies. Both portfolios have high ratings from ESG rating agencies.

However, EarthFolio is much more expensive than other robo-advisors. The Core Portfolio costs 0.28% and the Fossil Free Portfolio costs 0.60%, both assuming a 70% / 30% stock / bond split. This is in addition to the EarthFolio management fee. The management fee (0.50%) and the minimum investment ($25,000) are also high.

However, EarthFolio is a good option if you are strongly committed to not owning fossil fuels, want an ESG-only robo-advisor, and don’t mind paying more. (We also expect that the cost of the funds will come down in the future.)

Pros:

  • Strong commitment to ESG investing
  • Wide selection of ESG mutual funds and ETFs
  • Fossil free option with zero exposure to fossil fuels

Cons:

  • One of the more expensive robo-advisors we’ve reviewed
  • High account minimum
  • No tax-loss harvesting
  • No extra features like budgeting tools

💰 Takeaway

We like EarthFolio’s long-time commitment to ESG. They offer a wide selection of mutual funds and ETFs tailored to your goals. Some of the funds are from managers like Calvert that engage with management teams to advance ESG goals. But these advantages are offset by relatively high management fees and fund expense ratios.

🔔 Read the review of EarthFolio.

Ellevest Impact Portfolio

SustainFi Rating:3.8 / 5
Account minimum$0
Management feeFlat monthly fee depending on the membership tier:
• Ellevest Essential: $1 a month
• Ellevest Plus: $5 a month
• Ellevest Executive: $9 a month
ESG optionsImpact portfolios are available to all membership tiers at no extra charge. They replace large-cap U.S. and international equities and U.S. bond funds with ESG alternatives. Ellevest invests in over 20 traditional funds for other asset classes
Investment expense ratio (ESG portfolios)0.13-0.19%
Accounts supported• Taxable individual investment accounts
• Traditional and Roth IRAs
• 401k rollovers
• Spend & Save accounts
Human advisorsNot included but you can purchase access to financial coaches and advisors through the platform for an extra fee
Tax-loss harvestingNo
Automatic rebalancingYes
Best forWomen investors

Ellevest is a women-owned and run robo-advisor that targets women investors. They’ve just hit a watershed $1 billion in assets under management.

The founder, Sallie Krawcheck, is a Wall Street veteran who wants to reduce the investing gap between women and men. Women live longer while earning less than men on average, which requires a different asset allocation. Women also invest too little and leave too much money in cash, missing out on opportunities to grow wealth. Ellevest encourages women to invest more. It also uses women-specific salary curves and life expectancy data. (They also accept male clients.)

Ellevest offers an ESG option, the Impact Portfolio. But, according to our calculation, an Ellevest Impact Portfolio with ~70% in stocks invests only 44% of its assets in ESG funds. This is low compared to other robo-advisors with impact options.

The ESG funds in the Impact Portfolio are stock funds (SUSA, PXWIX, ESGE, and ESGD) and a bond fund (ACCSX). The line-up includes the Pax-Ellevate Global Women’s Leadership Fund (PXWIX), a women leadership fund, and Access Community Capital Fund (ACCSX), a fund that invests in underserved communities.

All ESG funds included in the portfolio invest in fossil fuels, albeit to a lesser extent than the conventional options. Also, Ellevest still uses many traditional equity and bond funds, which make up most of the Impact Portfolio.

Fund fees across Ellevest Impact portfolios range from 0.13% to 0.19% vs. 0.05% to 0.10% for the traditional portfolio. Ellevest doesn’t charge a management fee as a percentage of your assets. Instead, they charge a flat fee of $1 to $9 per month, depending on your membership tier.

Human financial advisors are not included in any of the membership tiers. But you can buy one-off sessions with financial planners at a discounted rate, which works if you only need one-off access to a financial planner. 

Pros:

  • Focus on women’s financial needs
  • Low, flat fees
  • Ellevest is more than a robo-advisor, offering online banking, financial planning, and career coaching

Cons:

  • A big chunk of the Impact portfolio (56% for the 70% equity / 30% bond portfolio) is still invested in conventional funds
  • Aggressive (higher-risk) asset allocation recommendations
  • No support for joint investment accounts or trusts
  • No tax-loss harvesting

💰 Takeaway

We like Ellevest’s emphasis on women-specific investment needs. However, most Impact Portfolios have over half of their assets invested in traditional funds. Going forward, we hope that Ellevest increases the allocation to ESG funds.

🔔 Read an in-depth review of the Ellevest Impact Portfolio.

Compare robo-advisors with sustainable options

Acorns ESG (Sustainable) Portfolio

Socailly Responsible Investing Pies

Socially Responsible Personal Strategy

Fees

$3-$5/month

Fees

$0 ($125 for M1 Plus)

Fees

0.49%-0.89%

Minimum

$5

Minimum

$100

Minimum

$100,000

E*TRADE Core Portfolios

SustainFi Rating:3.8 / 5
Account minimum$500
Management fee0.30%
ESG optionsSocially responsible portfolio
Investment expense ratio (ESG portfolio)0.16% (80% stock / 20% bond portfolio)
Accounts supported• Taxable investment accounts (individual, joint, custodial)
• Retirement accounts (traditional, Roth, and SEP IRAs)
• 401k rollovers
Human advisorsNone
Tax-loss harvestingNo
Automatic rebalancingYes
FeaturesBrokerage accounts
Best forExisting E*TRADE customers

E*TRADE Core Portfolios is the robo-advisor service offered by the popular brokerage firm E*TRADE. E*TRADE was founded in 1982, becoming one of the first online brokerages in the U.S. The firm was acquired by investment bank Morgan Stanley in late 2020.

E*TRADE is best known for offering brokerage accounts to self-directed traders. In contrast, Core Portfolios lets you outsource managing your portfolio to E*TRADE, which will use computer algorithms to match investments with your risk and return goals.

For its Socially Responsible Portfolio, E*TRADE invests in six or seven inexpensive ETFs. However, we found that only two of them were sustainable ETFs. The rest were conventional funds. As a result, the percentage of assets invested in ESG funds is relatively low:

  • 56% of the 80% stock / 20% bond portfolio is in ESG funds
  • 42% of the 60% stock / 40% bond portfolio is in ESG funds
  • 27% of the 40% stock / 60% bond portfolio is in ESG funds

Overall, the socially responsible portfolio doesn’t look very different from the conventional portfolio. For the socially responsible portfolio, E*TRADE replaces the large-cap U.S. stock and international stock funds with ESG funds, and everything else is the same.

The minimum to start investing is $500, and E*TRADE charges a 0.30% management fee. In addition, the funds in the socially responsible portfolio cost between 0.04% and 0.25%. The blended cost of the 80% stock / 20% bond portfolio is 0.16%, which is relatively inexpensive.

Core Portfolios do not include access to human advisors. E*TRADE offers access to financial consultants who can help design a portfolio for you, but this service starts with a $25,000 minimum investment.

Pros:

  • E*TRADE offers brokerage accounts in addition to the robo-advisor; the brokerage account comes with a lot of tools for active traders and commission-free trades
  • Easy to switch to Core Portfolios if you already have an E*TRADE account

Cons:

  • The socially responsible portfolio only invests in two ESG funds and, for most socially responsible portfolios, most of your assets will still be invested in conventional funds
  • No human advisor access
  • No tax-loss harvesting

💰 Takeaway

E*TRADE is not the best socially responsible option among robo-advisors, but it may be a suitable option if you already have a brokerage account with E*TRADE.

🔔 Read an in-depth review of E*TRADE Core Portfolios.

M1 Finance

SustainFi Rating:4.5 / 5
Account minimum$100
Management fee0%
ESG options2 pre-made ESG "pies" (Responsible Investing and International Responsible Investing) are offered but you can add any ESG ETFs or stocks to your portfolio. The pies are made from Nuveen ETFs
Investment expense ratio (ESG portfolios)0.38-0.39% for the Responsible Investing Pies
Accounts supported• Individual and joint investment accounts
• Traditional, Roth, SEP IRAs
• 401(k) rollovers
• Custodial accounts (M1 Plus)
• Trusts
Human advisorsNo
Tax-loss harvestingNo
Automatic rebalancingYes
Best for• Customized portfolios for self-directed investors
• No management fee

M1 Finance is an easy-to-use app that allows you to build customizable portfolios (called “pies”). M1 Finance is not a typical robo-advisor; it’s a cross between an online broker and a robo-advisor. Unlike typical robo-advisors, M1 Finance doesn’t charge any account management fees. They make money on lines of credit and optional extras such as “Plus” memberships.

M1’s pie portfolio model allows you to easily add a stock or an ETF as a piece of the pie. (They don’t allow trading mutual funds). You choose what percentage to invest in each asset class. The app offers two socially responsible “pies,” the Responsible Investing and the International Responsible Investing Pies. Both are made up of asset manager Nuveen’s ETFs and, of course, you can add other ETFs or stocks.

The International Responsible Investing Pie includes seven Nuveen ETFs. International “slices,” split between developed and emerging market ETFs, are 30% of the pie. The remainder is made up of large, mid, and small-cap U.S. stock ETFs.

The Responsible Investing Pie has the same U.S. stock ETFs as the International Responsible Investing pie. It doesn’t include any international ETFs. The pie splits the portfolio into five “slices,” including large-cap growth and value stocks, mid-cap growth and value stocks, and small-cap stocks.

The pies are not entirely fossil fuel free, but they only invest in ESG funds and have less exposure to fossil fuels than ESG portfolios from Betterment, Ellevest, or Marcus Invest.

Although Nuveen ETFs cost between 0.35% and 0.40%, which is more expensive than iShares ETFs, the total expense is lower because M1 doesn’t charge a management fee. ESG scores for these portfolios from MSCI and Sustainalytics are also high.

The Responsible Investing Pies only include equities, so they are not diversified enough for you to put all your savings in them. You also need bonds and, maybe, other asset classes like real estate. You can easily add them yourself. 

Pros:

  • Customizable portfolios allow you to invest in any ETFs or stocks you want in addition to premade options
  • Two solid socially responsible pies
  • No management fee (you can invest for free)
  • Extra features such as a checking account with a debit card and margin trading

Cons:

  • No goal-setting or budgeting tools
  • No traditional robo-advisor or human financial advisors
  • No tax-loss harvesting
  • No mutual funds

💰 Takeaway

M1 Responsible Investing Pies are a great ESG investing shortcut for self-directed investors. However, M1 Finance doesn’t offer financial planning or analyze your external investments, so it’s a better choice for more experienced investors.

🔔 Read an in-depth review of M1 Finance.

Marcus Invest Impact Portfolio

SustainFi Rating:3.8 / 5
Account minimum$1,000
Management fee0.35%
ESG optionsThe Impact portfolio invests in ESG funds for most stocks except real estate
Investment expense ratio (ESG portfolios)0.11-0.19%
Accounts supported• Individual and joint investment accounts
• Traditional, Roth, and SEP IRAs
• 401k rollovers
Human advisorsNo
Tax-loss harvestingNo
Automatic rebalancingYes
Best forOne-stop shop for robo-advisor, high-yield savings accounts, and personal loans

Goldman Sachs launched its robo-advisor, Marcus Invest (named after one of the bank’s founders, Marcus Goldman), in early 2021. Although Marcus Invest is a new robo-advisor, Goldman Sachs has already offered financial services through the Marcus platform. The platform also provides high-yield savings accounts, personal loans, and budgeting software. The one thing Marcus doesn’t offer is access to human advisors.

The Impact Portfolios invest in low-cost ESG ETFs in addition to traditional ETFs. Nearly all equities in the portfolio come from ESG funds (ESGU, ESML, ESGD, and ESGE).  Marcus Invest uses traditional funds for bonds and real estate. For a 70% equity / 30% bond portfolio, 68% of assets are invested in ESG funds.

Marcus primarily invests in ESG ETFs from iShares, most importantly the iShares ESG Aware MSCI USA ETF (ESGU). While these ETFs contain fossil fuel companies, they generally own less energy than conventional funds. They also exclude tobacco companies, thermal coal, and certain weapons manufacturers. Despite higher ESG scores than traditional portfolios, funds in the Impact Portfolio have weak scores from Fossil Free Funds.

The Impact Portfolio costs 0.11%-0.19% vs. 0.05%-0.16% for the traditional, Core, Portfolio. There is no extra management fee for choosing the Impact Portfolio.

Pros:

  • Online banking services (checking and savings accounts, Certificates of Deposit, personal loans)
  • A relatively inexpensive impact option

Cons:

  • No fossil free options
  • No access to human advisors
  • No tax-loss harvesting

💰Takeaway

Marcus Invest is a solid option if you also need a banking platform and do not expect to work with a human financial advisor. The Impact option is similar to what Acorns and Betterment offer, and we hope to see portfolios with fewer fossil fuel stocks going forward.

🔔 Read an in-depth review of the Marcus Invest Impact Portfolio.

Compare robo-advisors with sustainable options

Acorns ESG (Sustainable) Portfolio

Socailly Responsible Investing Pies

Socially Responsible Personal Strategy

Fees

$3-$5/month

Fees

$0 ($125 for M1 Plus)

Fees

0.49%-0.89%

Minimum

$5

Minimum

$100

Minimum

$100,000

Newday Impact Investing

SustainFi Rating:3.5 / 5
Account minimum$100
Management fee• 0.75%
• $20 annual third-party fee
ESG optionsNewday offers 14 thematic impact portfolios, such as Climate Action and Diversity and Inclusion
Investment expense ratioIncluded
Accounts supported• Individual investment accounts
• Traditional IRAs
• Custodial accounts
Human advisorsNo
Tax-loss harvestingNo
Automatic rebalancingYes
Best forMany impact themes to choose from

Newday is an impact investing app. You download the app and answer a few questions about your investment and impact goals and how much risk you are willing to take. The algorithm recommends asset classes, including equities, bonds, and real estate.

Newday offers 14 impact portfolios, including Catholic, Orthodox Jewish, and Islamic options. Unlike most robo-advisors, Newday invests in stocks, not in mutual funds or ETFs. The two exceptions are the Community Access Fund (a mutual fund) and a bond ETF.

Newday’s investment team selects stocks for each impact portfolio. The stocks fit themes like “Global Impact,” “Ocean Health,” or “Sustainable Agriculture.” The team assigns an impact score to each stock based on how much revenue is sourced from impactful operations. Portfolios exclude companies in controversial industries, such as alcohol, tobacco, and firearms.

Newday is a cross between a mutual fund and a robo-advisor. Fees are also similar to a mutual fund – Newday charges 0.75% of your investment each year. The app launched in July 2018, and there is minimal data on how its portfolios have done over time. In fact, the app is only showing performance data through May 2020.

Pros:

  • Choice of 14 impact themes, including three religious options
  • 5% of fees go to NGO partners

Cons:

  • Mutual fund-like fees (0.75%)
  • Controversial stock selection in impact portfolios
  • No long-term track record or up-to-date performance comparisons versus benchmarks
  • The app lacks up-to-date information
  • Mixed app reviews

💰 Takeaway

Newday is an interesting thematic investing concept. It is best described as an actively managed mutual-fund-as-an-app. But the team’s track record is unclear, and Newday hasn’t provided comprehensive performance data for its funds. We also found that some of Newday’s stock picks were controversial.

🔔 Read an in-depth review of Newday here.

Personal Capital Socially Responsible Strategy

SustainFi Rating:4.5 / 5
Account minimum$100,000 ($200,000 for Socially Responsible investing)
Management fee• First $1 million: 0.89%
• First $3 million: 0.79%
• Next $2 million: 0.69%
• Next $5 million: 0.59%
• Over $10 million: 0.49%
ESG optionsThe Socially Responsible Personal Strategy replaces U.S. and international equities with ESG options
Investment expense ratio (ESG portfolios)Varies
Accounts supported• Individual and joint investment accounts
• Traditional, SEP, and Roth IRAs
• Trusts
• 401k rollovers
• Checking account
Human advisors• Access to dedicated financial advisors
• Investors with over $200,000 invested have access to two advisors
Tax-loss harvestingYes
Automatic rebalancingYes
Best for• Top-notch access to human advisors
• High-net-worth investors

Personal Capital is a hybrid advisor that combines a robo-advisor with human professionals. Personal Capital has a higher account minimum ($100,000) and charges higher fees (0.89% to start) than most robo-advisors. But, in return, you get ongoing access to a human financial advisor. They can help you with complex financial needs, like optimizing your portfolio for stock option ownership.

Personal Capital offers an ESG option in partnership with Sustainalytics, a leader in ESG data and research. Their Socially Responsible Personal Strategy reached $1 billion in assets by mid-2020. The portfolio replaces U.S. and international stocks with ESG stocks and funds. Personal Capital relies on traditional funds for other asset classes, such as small-cap stocks and bonds. However, you are able to customize your investments.

The ESG allocation to U.S. stocks consists of a basket of individual, ESG-optimized stocks. In contrast, most other robo-advisors invest in ETFs instead of stocks. Personal Capital takes the Russell 3000 index of U.S. equities, ranks each company using Sustainalytics ESG scores, and excludes all stocks rated below their industry average. Energy (except utilities), tobacco, adult entertainment, gambling, and weapons stocks are excluded. The final portfolio includes between 75 and 85 stocks across nine sectors. About 20% of the U.S. stock portfolio is invested in small-cap stocks that are not ESG-optimized. Still, Personal Capital believes that total energy exposure is minimal at less than 1% of U.S. equity assets.

For international stocks, Personal Capital invests in several ESG funds.

In the summer of 2020, Personal Capital was acquired by a Canadian insurer, Empower. So far, we haven’t seen any material changes in strategy or product offerings.

Pros:

  • Ongoing access to human financial advisors
  • Ability to customize portfolios
  • Online financial planning tools

Cons:

  • More expensive than typical robo-advisors (but you get personalized services)
  • High account minimum

💰 Takeaway

Personal Capital is a good option for higher net worth investors with complex financial needs. We also like that investors with over $200,000 in assets can exclude stocks they don’t like from the portfolio. Betterment and most other robo-advisors don’t offer this option.

🔔 Read a detailed review of Personal Capital.

Sustainfolio

SustainFi Rating:3.4 / 5
Account minimum$5,000
Management fee0.50%
ESG optionsSustainfolio exclusively offers ESG funds, investing in a selection of ESG ETFs
Investment expense ratio0.20%-0.40%
Accounts supported• Individual and joint investment accounts
• Traditional and Roth IRAs
• Trusts
Human advisorsNo
Tax-loss harvestingYes (through the Schwab platform)
Automatic rebalancingYes
Best forESG-only robo-advisor

Similar to EarthFolio, Sustainfolio is an ESG-only robo-advisor with over $80 million in assets. Investments are held by Charles Schwab, and you join through the Schwab robo-advisor platform. You have to use the Schwab platform to access your account in the future.

The minimum investment is $5,000, lower than EarthFolio’s $25,000 but still high. The management fee is 0.50%. Portfolios are built using Nuveen and iShares ETFs like NULG, NUMG, NUSC, NUDM, NUBD, ESGE, and NUBD. Many of these ETFs cost between 0.20% and 0.40%. Sustainfolio doesn’t have conventional funds in the line-up. However, they don’t offer a fossil free option.

We’ve found that one major hurdle is the difficult sign-up process through the Schwab platform. Customer service has also been limited.

Pros:

  • ESG-only robo-advisor
  • Sustainfolio donates 1% of annual revenues to environmental nonprofits

Cons:

  • Inconvenient signup process through the Schwab platform
  • Relatively high management fee and fund expense ratios
  • No fossil free option
  • High minimum investment
  • No access to human advisors

💰 Takeaway

Sustainfolio is a small robo-advisor with few features, no access to human advisors, and limited customer support. However, the robo-advisor is committed to sustainability and exclusively invests in ESG funds.


The number of ESG investing options from robo-advisors has grown considerably over the past few years. We hope that you’ve found a strategy that fits your goals.

Compare robo-advisors with sustainable options

Acorns ESG (Sustainable) Portfolio

Socailly Responsible Investing Pies

Socially Responsible Personal Strategy

Fees

$3-$5/month

Fees

$0 ($125 for M1 Plus)

Fees

0.49%-0.89%

Minimum

$5

Minimum

$100

Minimum

$100,000

Methodology

We compared robo-advisors with an ESG offering based on management fees, ESG portfolio expense ratios, the percentage of the ESG portfolio invested in ESG funds vs. traditional funds, ESG portfolio ratings (from Sustainalytics and MSCI), portfolio exposure to energy, transparency, features like tax-loss harvesting and automatic rebalancing, and access to human advisors.