It is a personal choice whether you are interested in simply having your money make money or if you want to be sure it is directed toward responsible corporate policies. But that choice is not nearly as simple as it would seem. Finance does a great job of confusing by using terms that serve as short-cuts for what you think you are getting. The current finance buzzword for corporate sustainability is ESG investing.

ESG stands for environment, social and governance and is a (sort of) objective way of looking at companies that meet standards regarding their impact on the environment, how they show up in society, and how the companies are managed. While an ESG score is supposed to be objective, there are various rating platforms and standards can vary between them. It's important to know what ESG is, but maybe more important to know what it isn't.

ESG is not socially responsible investing (SRI). SRI has been around for a long-time and is generally about excluding business categories that you don't want to own. Depending on your religion or your values, you may choose to exclude anything from tobacco, fossil fuels, pharmaceutical companies, or even debt. ESG, though, may also include companies that meet its criteria in industries that you would prefer to exclude. For example, the IShares MSGI USA ESG fund has energy companies, companies that are being sued for allegedly faulty products, and companies that may simply annoy you because of how they conduct their business (think your cable company). If an extraction-based energy company is now creating a plan to move away from fossil fuels into alternative energy, is it a good company or a bad one? ESG in this example is the Schrodinger's cat of investing.

ESG is not impact investing. Impact investing tries to make measurable differences in areas like climate while also generating a financial return, with the financial return a secondary consideration to the impact. Impact investing is often done through private investments rather than public ones with which you may be most familiar. The private markets may relieve some of the natural tension of publicly traded stocks that attempt to increase short-term shareholder value. Impact is long-term, sustainable investments that make money while serving a larger purpose. Investors have different holding periods for the stocks they own; private markets tend to allow for more patient investing.

ESG investing is not without a give-up. In theory, companies that do well should also perform well, but studies are not completely clear about this. ESG is not about exclusion. It is about choosing companies in each sector that score well on the ESG criteria. The best investment results would likely come from pairing ESG along with other technical factors.

ESG is not greenwashing. ESG investments and investing are evolving. There will inevitably be stops and starts along the way. A high profile environmentally friendly company like Tesla was recently booted from the ESG index because of poor governance and social scores. Exxon is a large holding in the S&P 500 ESG Index because it rates well compared with other energy companies. ESG is a framework for company governance and an investment framework.

ESG investing is not necessarily better than earning more and giving away more. Your values are expressed in a variety of ways, far beyond investing. How you spend your money is an obvious expression. How you give money away is also an expression. Some of our clients are charitably inclined and want their investments to grow as much as possible as a way to give more money away.

ESG investing is not insignificant. Whether you are a believer in ESG or not, there is more pressure being applied on companies to be good citizens as well as high-performing businesses. There is some evidence that the two are complementary but there is more evidence that they are not mutually exclusive. There are arguments that those who are investing on behalf of others - in vehicles such as pension funds or retirement plan options - would not be meeting their fiduciary duty by investing solely through the ESG lens. This will continue to be a layered issue.

There are many ways to match your values and your investing. ESG is one of them, but it is a complex and evolving one.

Ross Levin is founder of Accredited Investors Wealth Management in Edina. He can be reached at ross@accredited.com.