Mutual funds or certificates of deposit?
Is it possible to enjoy financial security, growth, and prosperity, and save the planet while you're at it? There are more and more "green" investment options available...mutual funds, renewable energy company stocks, and growth in "green" venture capital. What does "triple bottom line" mean to you? What has your experience been like with socially responsible investing? And what have shareholder activists been able to accomplish? Tell us about the decisions you've made with your money...and read about Socially Responsible Investing in this post from our green team. You know that environmentalism and social responsibility have made it into the mainstream when they are represented in electronic ticker tape on the floor of the New York Stock Exchange. According to Social Investment Forum's Report on Socially Responsible Investing (SRI) Trends in the US, released in March of this year, SRI is growing faster than the rest of the investment world thanks to concerns about Climate Change, the humanitarian crisis in Sudan and a rise in interest by institutional investors. In fact, SRI now makes up an estimated $2.71 trillion out of $25.1 trillion in the US marketplace. So what does this mean for you? It means you now have the power of the dollar behind you to make change happen. You no longer need to be a billionaire or a politician to be heard. Every time you invest in an SRI, you divert funds away from companies that participate in unfair labor practices, destroy the environment, support oppressive regimes or animal cruelty. The power of socially responsible investing is big, and getting bigger and it all boils down to you supporting with your dollar, the companies who do the right thing. It also adds a new element of competition to the market. Many experts believe that socially responsible companies are better long-term investments because they are more likely to outperform those that fall behind the sustainability curve. Who would have guessed, even five years ago, that green investing would be a hot topic for consumers but here it is, people. Just imagine, by investing wisely, you could make change and CHANGE at the same time! Now there’s a Green Concept! What do we mean when we say socially responsible investing? According to www.socialinvest.org, SRI covers a broad range of environmental, social and corporate responsibility focuses, as well as shareholder activism in the form of resolutions filed by investors aimed at compelling companies to address social and environmental issues. Meaning, if you don’t like the social or environmental practices of a company, you can really make a difference as a shareholder by filing an official complaint and sending your money to a company who does. There is so much to choose from and it goes far beyond renewable energy investments. SRI also includes community investing, such as banks, credit unions or loan funds developed to create jobs, housing and environmental programs for poor communities. Your decision can be based on your values, areas of interest, the company’s overall performance or a combination of these things. Then, of course, you can always choose a proven market champ whose corporate social responsibility commitments align with your values. As an investor, you can choose the companies you would like to invest in on an individual basis or you can pick from an array of funds that provide options based on their own set of criteria. For a simple, easy to understand example of what this looks like, you can check out the Sierra Club Stock Fund, which lists their specific investment guidelines and criteria for potential investors to review. It’s important that you evaluate the positive and negative practices of investment portfolios or mutual funds. This process is called screening and it may include looking at a company’s corporate governance practices along with their social and environmental performance. Resources There are a number of places you can go to measure both the responsibility and returns performance of companies that meet globally recognized corporate responsibility standards. One such site is Ftse4good, which can also help you with the actual investing part as well by creating a correlation between responsible corporations and financially successful corporations. Another well respected research and analysis resource is Generation Investment Management, which was started by Al Gore in 2004 to provide a platform to integrate sustainability research into financial performance. Here are some more SRI fund companies that you can check out to further your Green Investing research. Keep in mind is that all of these funds have a minimum amount of money you need to contribute in order to participate, and multiple fee structures so be sure to read the prospectus, which is usually downloadable in a PDF file on each site, to find out what those number are. If the regular account amount is more than you were thinking of committing, be sure to look at the retirement account option, it’s usually considerably less. We are not trying to give you investment advice, but are offering some ideas for sustainable investment. New Alternatives FD Inc. (NALFX) Portfolio 21 (PORTX) Powershares Wilderhill Clean Energy Portfolio (PBW) Winslow Green Growth Fund (WGGFX) For some, it might sound daunting and complicated at first, but SRI is an exciting and rewarding area where you have an opportunity to grow your money while making a difference.