Betterment Launches New Socially Responsible Investing Options

By Alex Padalka October 26, 2020

Robo-advice pioneer Betterment says it has rolled out new portfolio offerings aimed at clients who want to invest for environmental and social impact.

The two new portfolios, Social Impact and Climate Impact, will be available to Betterment for Business and Betterment for Advisors customers.

Betterment is also enhancing the socially responsible investment offering it launched in 2017, which will now be known as the Broad Impact portfolio, the company says.

The Social Impact portfolio builds on the Broad Impact portfolio but with added focus on U.S. companies committed to diversity, including the NAACP ETF, which aims to add exposure to firms with robust racial and ethnic diversity policies as defined by the National Association for the Advancement of Colored People, and the SHE ETF, which focuses on firms with greater gender diversity among their top ranks, according to Betterment.

The Climate Impact portfolio, meanwhile, focuses on companies with the lowest carbon footprints within every sector, funds that exclude firms holding fossil fuel reserves and “green bonds” funding projects in alternative energy, pollution control and climate adaptation, Betterment says.

Meanwhile, Betterment customers using its SRI offering can opt into its Broad Impact portfolio or start a new portfolio, according to Betterment.

All three of the new portfolios are available to customers with a 401(k) account through Betterment for Business, while advisors on Betterment for Advisors will be able to offer all three to their clients, Betterment says.

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