It helps because all money has its history attached. Instead of rewarding someone because they have proof they did work for someone else, you reward them because they have proof they did work for someone in good standing with you. If an oil company took risky actions and polluted the environment as a result, why should the people who took those risky actions be rewarded for it? You can decide not to reward them for it by looking at the history of the money you accept, and not selling to people who were rewarded for the undesirable action, or to people who were rewarded for rewarding those people.
You effectively turn their money off. Everyone knows they can’t get rewarded by you for rewarding the bad actor, so they have less of an incentive to reward the bad actor. As a result, bad actors don’t get rewarded.
This works even with traditional tokens. You can track the history of ether. It’d be even easier to track with Bitcoin-style unspent transaction outputs, which we can create on Ethereum with a contract.