Green Investments

“It’s not easy bein’ green.” -Kermit The Frog

While many of us take the time, and effort, to live in sustainable, minimal-impact way, there is a realm of green living that is difficult for even the greenest greenie to consider: investments. Socially responsible portfolios have more than tripled since 1995, with more than one in ten dollars invested in the U.S. estimated to be part of such portfolios. Insist on entrusting your funds to companies that share your personal and social values. Make this a decision metric when considering investments.
This month’s message: Think Green While Investing

How investments really work – If you invest $1,000 in a mutual fund, stock, or bond, that $1,000 buys you a stake in that particular stock or bond, or in the case of a mutual fund, some combination of the two. While to an investor it feels as if that money is sitting in an account and earning interest, in reality, the companies that issued the stocks and bonds that you purchased are using your money to pursue their corporate goals. You in turn share in that company’s profit, or loss.

What exactly are those corporate goals? – Therein lies the challenge. To truly understand what is being accomplished with your $1,000, you would have to research each individual company to determine if their goals are in line with your goals. For example, these objections might come to mind when you think about the following companies:

Gap / Nike / Wal-Mart – Known to use sweat shop labor
Exxon/Mobil – Valdez oil spill, Alaska
United Defense – Arms/weapons manufacturer
Philip Morris – Tobacco
Dial Soaps, Procter & Gamble – Known to test its products on animals

If you wouldn’t donate money to a particular company, your rule of thumb should be not to invest in any stock, bond, or fund by which that company benefits.

Evaluate your current holdings – Review your fund prospectus for mutual funds, and corporate agendas for stocks or bonds you may hold. Decide if you would like to continue to support the companies that are using your money. If you don’t like what you find, research your options, and move your money!

Investigate investment portfolios with a conscience – There are a number of options for investors. Rather then listing them here, I suggest checking the Yahoo! Finance index page for Socially Responsible Mutual Funds. You can research individual bonds or stocks by visiting that company’s web page, and/or obtaining an annual report and ratings from Yahoo! Finance, or another financial website.

Please note, you should thoroughly review any fund’s prospectus before investing.


Resources on the Web

Socially Responsible Mutual Funds
NRDC’s Charitable Gift Annuities

Socially Responsible Fund Families:
Pax World Funds
Social Investment Forum

Laina’s Favorite Funds:
Sierra Club Mutual Funds
New Alternatives Fund