Investing in Green Businesses
For a long time, money used for good will was called charity, while money used to make more money was called investing. No more.
Today, the two concepts are forming into a financial arena called socially responsible investing. Both investors and mutual fund companies are implementing this new idea and discovering that they can be profitable and at the same time do some good for the environment and society.
“Socially responsible investing means you don’t have to compromise your own personal beliefs to make money on Wall Street — whatever those beliefs are,” said Bob Guthrie, an investment broker with A.G. Edwards in Burlington, Vt.
Even back in the early 1900’s the idea of choosing investments for social reasons occurred when church members formed together and refused to invest in tobacco or alcohol companies. Guthrie also says that the trend has continued with investors dodging corporations associated with the Vietnam War or companies investing in South Africa. And that trend continues today with investors selecting companies that are more environmentally friendly over those that are not.
But growth in this type of investing has mushroomed during the past few years as more and more investors have moved social consciousness into the mainstream of investing. And the impact is being felt.
With help from stockholders, says Rob Kruger, vice president of portfolio management at Progressive Asset Management, business practices concerning the environment are beginning to change, While the issues may differ, he said companies are realizing they will suffer the consequences if they aren’t viewed as being socially responsible.
“As this investing community continues to grow, a lot of proposals are being put forward by investors at annual shareholder meetings,” Kruger said. “A whole variety of issues and activities is now being addressed.”
As part of its operational procedures, Progressive Asset Management conducts research for eco-friendly and socially responsible mutual funds. The firm filters out companies for environmental problems or nuclear involvement or whatever issues their clients are concerned about.
“As time flies, companies are becoming more and more cooperative with us,” Kruger said. “Many of them are now very eager to talk about these social and environmental issues.”
Guthrie agrees that business practices are changing and says American companies are aware of shareholders who are concerned with the environment.
“Make sure your hard-earned capital is not invested in companies with little concern for the environment,” he advises. “Be sure to keep these things in mind when you invest and companies will too.”