Updated in April 2026
Buying individual shares is probably the most familiar way of investing for most investors. You can buy them easily through a traditional bank by opening a custody account. This account will likely be linked to your regular bank account for you to buy shares online. Sustainable investing through shares means you buy a piece of a company that you trust is beneficial to our society and has a bright future ahead. Indeed, the latter two points are a key challenge in deciding what shares to buy. I will dive into that in a separate article later.
Disclaimer:
Please note that my evaluation of the options below are all based on my own personal experience and subjective assessment. I am not a finance professional, so none of it constitutes investment advice. Remember: It’s your money and you’re ultimately responsible for what you do with it. However, this list will definitely help you in getting a broader overview of what you CAN do to invest with a positive impact.
Sustainability Impact Potential
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As I describe in more detail in a separate post, the stock market is not the best place to go looking for impact. The company you’re investing in usually does not see a single cent when you buy their shares. Broadly speaking, you have two sustainability-related reasons for buying shares:
- Opportunity-focused and morally aligned: If you believe in the sustainable transition, you believe that sustainable companies will enjoy better long-term success. This can mean they are better placed to sell their already sustainable products or services, or that their strategy already considers sustainability risks and opportunities well. For instance, a sustainable company will be more resilient in the face of carbon taxes or supply chain disruptions due to extreme weather. And finally, you may sleep better knowing that your investments return do not harm people or the planet. Both are very valid reasons to invest, but your investment decision doesn’t change anything anywhere.
- Active ownership: This means investing in a company that is not yet super sustainable itself. In this case, you may use the voting rights that come with share ownership to support shareholder proposals that nudge the company down the path of virtue. Shareholders could, for instance, ask the company’s board to set a more ambitious climate target. In practice, however, not all banks make it easily possible to exercise your voting rights. Plus, it comes with quite a bit of effort on your part. If you want a chance to influence companies through your shareholding, investing in an Impact Fund is much more straightforward.
> You have formed strong trust in the sustainability credentials of one particular company. If you buy its shares, you’ll invest in its future and share in its success.
> You have at least few thousand to invest for each company you want to invest in. You can also start with less, but then the bank’s transaction fees will hit you more substantially. I personally try to buy shares in big enough quantities that the fees are 1% or less. Online banks or neo brokers tend to have lower fees, making even small investments attractive.
> You have a long investment horizon (5+ years) to sit out fluctuations in share price.
Advantages
- Relatively easy to do. Buying shares is a very common form of investment, and shares in sustainable companies are no different. As with any investment nobody can reliably tell you what to buy of course. Still, you should seek the advice of your bank or maybe also your friends before making your first investment.
- Targeted. You can focus on specific companies in whose products and operations you have confidence.
- Transparent. The law requires listed companies, i.e. the sort that are large enough to have their shares traded on a stock exchange, to publish lots of information on their business – including, increasingly, sustainability information. They are also frequently in the media spotlight, so independent news is easier to come by.
- Moderate risk. Large companies are less vulnerable to shocks to the economy. Although the value of their shares can fluctuate a lot in the short term, shares tend to go up in the long term. But remember that diversification is key and that there is still a risk that all your shares lose value simultaneously. Also, not all listed companies are actually that large.
Disadvantages
- Share values fluctuate. If you end up needing your money back quickly, you might be forced to sell at a time when the share price is low and thus lose money.
- Nobody’s an angel. Only large enough companies have their shares traded on the stock exchange for everyone to buy. And the larger the company, the higher the chance that they are involved in something that you don’t like.
- Initial financial hurdle. High fees with traditional banks mean that there is a relatively high financial starting investment from which it makes sense to start buying shares. Neo brokers such as Trade Republic or Robinhood have changed this in recent years, making stock trading more accessible. I don’t have any personal experience with them, however.
- No real impact. Unless your bank or stock broker allows you to vote for shareholder resolutions – and you actually decide to do so – buying stocks creates virtually zero impact.
Conclusion: Great if you’re laser-focused
Do you know a company or two you really like or where you are really confident they have a bright future ahead? Then buying their shares is the best way to directly profit from the opportunity. But shares are also inherently risky and low-impact. Both are reasons for not holding only individual shares.
- To improve your diversification and lower your risk, it’s always good to invest in an ETF as well. An ETF which consists of many shareholdings and thus spreads risk.
- If you want your money to do some good in the world, you need to look for more impact-oriented investments. Impact Funds are one option, or, even better: Crowdfunded Loans and Bonds or Crowdfunded Private Equity.
Not sure if buying individual shares is a good idea for you? Then we don’t you take a step back and let me help you get started with my Beginner’s Guide. We’ll figure out what type of investor you are and based on that what investments might best suit your needs.