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According to Morgan Stanley data, more than half of individual investors are planning to increase their allocations to sustainable investments by 2025, while over 70% believe strong ESG practices have the potential to deliver higher returns. 

The problem is that ethical investing is largely at odds with the broligarchy. Gaining significant political capital in the wake of Donald Trump’s return to the White House, the broligarchy is comprised of Tesla CEO Elon Musk, Meta CEO Mark Zuckerberg, and Amazon founder Jeff Bezos, among other former PayPal founders like David Sacks and Peter Thiel, who have risen to prominence in the White House and on Wall Street, respectively.

Broligarchy stocks remain a dominant part of Wall Street’s ‘Magnificent Seven’ tech stocks that command around 35% of the S&P 500’s market capitalisation. While Magnificent Seven stocks like Nvidia and Microsoft are largely held in ethical portfolios, the likes of Tesla, Meta, Amazon, Google owner Alphabet, and Apple are largely excluded from ethical funds due to concerns over online safety, labour rights, and poor working conditions. 

In recent years, missing out on the market performance of these stocks has caused ethical investors to lose out on their full earnings potential on the back of the artificial intelligence boom on Wall Street. However, since Trump’s return to office, we’ve also seen these ethical portfolios become more resilient to the market volatility that’s impacted large-cap tech stocks. 

The Rise of the Broligarchs

While the pervasiveness of Musk, Zuckerberg, and Bezos is nothing new, the resounding US presidential election victory of Donald Trump has seen tech leaders descend on the White House in a bid to win favour. 

Commentators accuse the broligarchy of cosying up to Trump because they think his softer stance on taxes and favourable view of deregulation could grow their business interests. 

In the case of Musk, the world’s richest man wasn’t merely on the sidelines cheering the Trump campaign. He was the president’s top donor on the campaign trail and was appointed to his own governmental department designed to cut what he deemed to be unnecessary spending. 

We subsequently saw Zuckerberg reflect on Trump’s stance on censorship by removing content restrictions and eliminating fact-checking on the platform in January. Later, Meta’s human resources vice president announced the end of the firm’s diversity, equity, and inclusion (DEI) initiatives.

According to Pew Research data published one month after Trump’s inauguration, 67% of adults in the United States held an unfavourable view of Mark Zuckerberg, while 54% had a negative perception of Elon Musk. 

Coincidentally, a Moneywise survey of US savers published days later found that 67% of respondents consider ethical factors when making investment decisions, with 21% prioritising ethics as a primary focus. 

Despite this, the lure of reliable returns has seen many investors remain committed to broligarchy stocks. Just 27% of asset managers have claimed that they were willing to sacrifice even a very small financial return for ethical stocks, citing fiduciary duty as a key consideration. 

But could Wall Street’s leading tech stocks be opening the door to an ethical investing comeback in 2025? 

Finding Resilience in Ethical Investments

It’s been a volatile year so far for the tech stocks that have helped to push the S&P 500 to new heights in the first quarter of 2025. 

Trump’s aggressive stance on tariffs saw the index fall more than 12% in less than a week, while Elon Musk has seen consumer sentiment tumble for Tesla vehicles. 

On the world stage, Tesla has lost popularity at an alarming rate. In March, a survey of 100,000 Germans conducted by T-Online found that 94% of respondents claimed that they would never purchase a Tesla car. 

While Tesla’s stock has shown signs of recovering from a turbulent Q1 2025, consensus forecasts for earnings over the year have fallen to $1.93 per share, down from $2.74. 

With Trump’s commitment to pursuing his ambitious policies on trade showing precious few signs of calming following threats of placing 50% levies on imports from the European Union, the resulting market volatility could be a launchpad for an ethical stocks comeback. 

We’ve seen the resilience of ethical stocks before. When Russia’s war in Ukraine broke out in 2022, sustainable investment products were especially impacted due to their lack of exposure to fossil fuel energy. Despite this, outflows from sustainable funds in Europe were not as strong as their more-traditional counterparts. 

This indicates that ethical investors are more inclined to hold their positions in the face of volatility, helping to build a level of resilience at a time when uncertainty is impacting Wall Street. 

The higher volumes of dividend stocks among ESG options can also help passive investors, particularly those who use stocks and shares ISAs to build their positions. 

Because capital gains allowance changes and dividend reductions have reduced the tax-free advantages of dividends for investors, there’s added appeal for opening an ethically focused individual savings account to build passive income at a time when volatility is threatening to impact more speculative investments. 

Can Ethical Investing Beat Volatility?

President Trump’s famously climate-sceptic nature and rollback of DEI commitments in the United States will have an impact on global ethical investment options. 

But at a time when more investors are becoming wary of the broligarchy and the market volatility that the president’s administration is overseeing, ethical investing may prove to be a more resilient investment strategy in 2025. 

With clean energy technology continuing to evolve, ESG investments as a whole could be an excellent alternative strategy for investors seeking to build ethically sound portfolios. The broligarchy may have more power than ever before, but more investors appear ready to pick and choose stocks on their terms. 

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