For many years, money that was used for good will was called charity and money used to make more money was called investing. Not anymore.
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 form of selective investing has skyrocketed during the past couple of years as more and more individuals and corporations have moved social and environmental consciousness into the mainstream of their investments. And this impact is being felt worldwide.
With help from stockholders, business practices concerning the environment are starting to change, said Rob Kruger, vice president of portfolio management at Progressive Asset Management. While the issues may vary, he said companies are realizing they will suffer if they aren’t viewed as being socially responsible.
Kruger said, “As this investing community continues to grow, a lot of proposals are being addressed by investors at annual shareholder meetings. A whole spectrum of issues and activities is now being put forward.”
As part of its operation, Progressive Asset Management conducts research for socially responsible mutual funds. The firm screens companies for environmental problems or nuclear involvement — whatever issues their clients want investigated.
“As the clock ticks, companies are becoming more and more cooperative with us,” Kruger said. “A lot of them are now very anxious 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. “Keep these things in mind when you invest and corporations will, too.
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