Last week, an article I wrote on Fortescue Ltd (ASX: FMG) caught the attention of a potential investor who reached out to me with an interesting question.

The article highlighted how the Fortescue share price had plunged around 40% over the past year and could now represent a good buying opportunity.

But the investor had concerns beyond the company's ability to deliver returns.

She questioned: "How can I invest in a mining company when I don't approve of their impact on the environment?"

The answer could be simple: 'You can't, so don't invest in Fortescue shares'.

However, the question deserves a better answer than that and opens the door to exploring ethical investment options on the ASX.

Can mining shares offer ethical investments?

I've been to numerous mine sites around the country and have often been appalled by their impact on the environment.

And every investor should approach investing with diligence. Research is critical, and you should invest in companies that align with your values.

But if you do your research and dig a little deeper, you may be surprised by what you find.

When I was conducting due diligence research for institutional investors, I noticed over the years that those investors were increasingly interested in ethical, social, and governance (ESG) issues, which, for some, formed part of their evaluation criteria.

But it's hard to argue that investing should be more about the financials, as ESG issues can have a material effect on the bottom line. Think costly cleanups and legal implications resulting from environmental disasters, to list one extreme example.   

Ethical investment options on the ASX

Funds, such as the Australian Ethical Investment Ltd (ASX: AEF), that claim to place ethical concerns at the forefront of their strategy, have been around for decades.

And Australian Ethical Investment has delivered more than warm fuzzies for investors, with the fund's share price rising more than 20% over the past year.

Australian Ethical Investment holds positions in numerous ASX companies, including National Australia Bank (ASX: NAB), Westpac Banking Corporation (ASX: WBC), Bank of Queensland Ltd (ASX: BOQ), and Macquarie Group Ltd (ASX: MQG).

Clearly, Australian Ethical Investment has targeted banking as a sector on the ASX that can deliver returns for ethically minded investors.

Australian Ethical Investment also holds positions in numerous ASX healthcare companies, including CSL Limited (ASX: CSL), ResMed Inc (ASX: RMD), and Cochlear Ltd (ASX: COH).

Perhaps more controversially, Australian Ethical Investment holds stock in miner Pilbara Minerals Ltd (ASX: PLS).

On one hand, Pilbara Minerals' mining operations can be viewed as having a direct and devasting impact on the natural environment as it harvests the raw materials to produce lithium.

On the other hand, the company can offer an ethical investment opportunity as it claims to operate a sustainable business and plays "a leading role in the world's rapidly growing battery materials supply chain".

Is investing in Fortescue shares ethical?

Fortescue, one of Australia's biggest mining companies, is often described as a pure iron ore play.

To some extent, that is true, as Fortescue's mining operations are centred on mining and shipping iron ore.

But there is certainly more to it than that.

Fortescue describes itself as a 'global green technology, energy and metals company' which claims it's on a path to eliminating fossil fuels from its operations with a target to achieve zero emissions without carbon offsets by 2030.     

Income generated by the mining company also bankrolls various philanthropic endeavours through the Minderoo Foundation, including Walk Free, an international human rights group focused on eradicating modern slavery.

Clearly, mining companies can have positive impacts beyond delivering profits to shareholders.

It's not for me to say whether or not a mining company can represent an ethical investment.

In the end, you will need to do your own research, reach your own conclusions, and invest in companies that align with your goals and values.

The more research you do, the better placed you will be to make informed decisions.