Most parents dream of giving their kids a solid foundation—one built on love, wisdom, and smart money habits. But in a world that’s constantly changing, it’s not enough to just teach our kids how to save or invest. We need to show them why money matters. How it shapes the world. And how it can be used as a force for good.
Enter ESG investing.
It sounds fancy, but it’s actually a simple, powerful way to build wealth while aligning with your family’s values. And more importantly, it’s an incredible tool for teaching your kids what it means to be responsible—not just financially, but globally.
Let’s break it down.
Why It’s Not Just About the Numbers Anymore
There was a time when investing was purely about returns. You put your money into whatever fund gave you the highest yield—period.
But today, many investors are asking deeper questions:
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What am I really supporting with my money?
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Do these companies care about the planet?
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Are they treating their workers with fairness and dignity?
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Is their leadership transparent and ethical?
These aren’t just financial questions. They’re value-driven questions. And they matter—especially to the next generation.
If we want our kids to grow up caring about more than just their bank balance, we need to show them that money has meaning. That’s where ESG investing shines.
What Is ESG Investing?
ESG stands for Environmental, Social, and Governance—three key factors used to evaluate companies on their impact and ethical standards.
1. Environmental
This includes a company’s policies on:
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Climate change
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Carbon emissions
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Pollution
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Renewable energy use
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Waste management
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Water conservation
If a company is working to reduce its carbon footprint or invest in clean energy, it scores high on the “E.”
Example: A company like Tesla may score well in this area due to its focus on electric vehicles and renewable energy.
Learn more about ESG environmental factors from the UN Principles for Responsible Investment.
2. Social
This measures how a company treats people:
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Fair wages and labor practices
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Diversity and inclusion
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Health and safety
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Community involvement
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Human rights
Example: A company that promotes gender equality, offers parental leave, and supports local communities would score well in this area.
The World Economic Forum provides further reading on social impact investing.
3. Governance
This refers to how a company is run:
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Transparent leadership
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Fair executive pay
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Ethical accounting
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Board diversity
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No corruption or political manipulation
Example: A company that has diverse leadership, avoids shady financial practices, and prioritizes long-term stability over quick gains shows strong governance.
Check out this guide from the CFA Institute on governance factors.
Why ESG Investing Is a Perfect Lesson for Kids
If you’re like most parents, you’ve told your kids to:
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Be kind
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Recycle
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Share with others
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Tell the truth
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Stand up for what’s right
Those are great lessons. But kids also notice what we do with our money. When you invest in ESG funds, you’re showing them that your values don’t stop at the dinner table—they show up in your dollars, too.
Here’s what your child can learn:
💡 Money is a tool, not just a trophy
Instead of seeing wealth as a status symbol, your child begins to see it as a way to make a difference.
💡 Every dollar is a vote
When you invest in a company, you’re helping it grow. That’s a vote of confidence. ESG teaches kids to “vote” for companies doing the right thing.
💡 Their future matters—right now
From climate change to social justice, our kids are growing up in a world with big issues. ESG investing helps them feel empowered, not overwhelmed. They’re not too young to make an impact.
Do ESG Funds Actually Make Money?
Let’s get practical.
It’s great to invest in line with your values—but will your portfolio suffer?
The short answer? No.
Multiple studies show that ESG funds perform just as well—or better—than traditional funds over time. Companies that care about sustainability and ethical practices tend to be better managed, less risky, and more future-focused.
A 2021 Morningstar study found that 75% of ESG funds outperformed their traditional counterparts over a 10-year period.
That’s because companies that are environmentally conscious and socially responsible are often more resilient. They attract better talent, face fewer scandals, and adapt better to change.
So you’re not sacrificing performance. You’re simply choosing long-term, values-driven growth.
How to Start ESG Investing With Your Kids
You don’t need to be a financial advisor. And your kid doesn’t need to understand the stock market. Here’s how you can get started:
1. Open a Custodial Investment Account
At Mostt, we make it easy for parents to start investing for their children’s future—with as little as $25/month. You can set up an account in minutes and choose ESG-friendly funds that align with your family’s values.
Bonus: It’s also a great way to teach delayed gratification and long-term thinking.
2. Pick an ESG Fund
Here are a few beginner-friendly ESG funds to consider:
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Vanguard ESG U.S. Stock ETF (ESGV) – Diversified and low-cost
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iShares MSCI KLD 400 Social ETF (DSI) – Focused on strong ESG performers
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SPDR S&P 500 ESG ETF (EFIV) – Tracks S&P 500 but excludes lower ESG scorers
Always check:
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Expense ratio (lower is better)
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Long-term performance
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Company holdings (see if they align with your values)
You can use Morningstar’s ESG Screener to explore other options.
3. Make It a Family Activity
Set a monthly “money meeting” where you:
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Look at your child’s investment account
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Talk about what companies they’re invested in
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Discuss recent news (e.g., a company pledging to go carbon neutral)
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Ask your child what causes matter most to them
They don’t need to understand everything. What matters is the conversation.
Real-World Example: Teaching Through Investment
Let’s say your 9-year-old cares a lot about animals. You might:
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Find an ESG fund that excludes companies involved in animal testing
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Look at companies supporting wildlife conservation
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Talk about why those companies matter
Now, every time they contribute to their account, they know it’s not just about money—it’s about mission.
Or maybe your teen is learning about climate change in school. You can show them how companies like First Solar or Enphase Energy are helping lead the clean energy movement—and how their investments help support that work.
Frequently Asked Questions
❓Can I switch from regular funds to ESG funds?
Yes! Many platforms (including Mostt) allow you to adjust your portfolio and reallocate your investments. Talk to your advisor or check your app’s settings.
❓Are ESG funds more expensive?
Not necessarily. While some ESG funds used to have higher fees, many now offer low expense ratios. Always compare before buying.
❓Is ESG just a trend?
No. ESG is growing rapidly. In fact, Bloomberg predicts ESG assets could reach $53 trillion by 2025, making up one-third of all assets under management.
That’s not a trend—it’s the future of investing.
Why This Matters More Than Ever
Raising kids who are good with money is important. But raising kids who use money to do good? That’s the legacy we really want to leave.
In a world where our children will face challenges we can’t yet imagine, we can give them tools that go beyond dollars and cents:
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Critical thinking
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Compassion
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Courage to act
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The belief that their choices matter
ESG investing is more than a strategy. It’s a mindset. And starting now—while they’re young—can help them grow into confident, ethical, financially savvy adults.
Your Next Step: Start Investing with Purpose
You don’t have to do everything today. But you can take one small step.
✅ Open an account
✅ Pick one ESG fund
✅ Start a conversation with your child
✅ Make a monthly contribution—no matter how small
You’re not just building wealth. You’re building awareness, values, and vision.
And that kind of wealth? It lasts.
👉 Get started with Mostt today and begin investing in your child’s future—with purpose.