Ethical investing began with a fund for peace
In 1971, the Pax World Fund pioneered ethical investing by screening out controversial industries, laying the groundwork for modern ESG strategies and proving values could drive finance.
The first ESG investing emerged in 1971 with the Pax World Fund, a pioneering mutual fund for socially responsible investing. Founded by two Methodist ministers, it explicitly avoided companies involved in weapons, alcohol, tobacco, and gambling, favoring those promoting peace and social justice. This fund, born from anti-war sentiment, showed that ethical considerations could integrate into financial decisions without sacrificing returns. Starting with just $101,000, it challenged Wall Street's profit-first mindset. Its success legitimized values-driven finance, paving the way for today's multi-trillion-dollar ESG industry, proving impact and performance can go hand-in-hand.