As investment houses collapse, homeowners foreclose and governments dive in to bail them out, now is as good a time as any to put what money you have where your values lie. After all, companies rise to fill market needs. And presidential candidates and investment analysts agree: In a tough economic climate, sustainability will sustain us.
For Cliff Feigenbaum, who founded GreenMoney Journal 15 years ago, aligning personal, corporate, and financial principles is nothing new. More than 2 trillion of American investment capital is already screened on some level (to weed out tobacco and alcohol, say)1. And that number is growing2. “We’ve been waiting for it—the junction of money and values,” he says. “And we’ve seen what unethical business practices can do3.” Now, there’s work to be done, and money to be made.
In fact, the growing field of “socially responsible investment” funds, or SRIs, could produce a new cash crop in the marketplace4. They use strategies of screening, shareholder advocacy and community investing to promote socially and environmentally responsible business practices.
Within SRIs, demand is growing for funds that target specific environmental and cultural concerns5. Calvert recently launched a water fund. Several others focus on renewable energy.
In fact, investments in green technologies got a boost earlier this month from the new Energy Improvement and Extension Act of 20086, which extends tax credits to the solar industry for eight years and for wind and geothermal for one and two years, respectively7.
Experienced investors or those with help from financial planners may have time to target growing companies within these growing green sectors. Analysts at Turner Investment Partners see recycling as a category that appeals even to companies focused entirely on tightening their belts. Saving energy, which saves money, and creating profitable “back-end” reuses for old things benefit bottom lines and the earth. Two smaller recycling companies they’re investing in—LKQ and Sims Group—are making money and are poised to grow8.
For most new socially responsible investors, education is a great place to start. You can review market trends, review fund performance and find plenty of financial advice at The Social Investment Forum , Socialfunds.com , and the GreenMoney Journal . Feigenbaum recently reviewed 10 new green mutual funds; of them, he says Calvert, Pax and Domini are among the most established. That said, you needn’t be flush to join; the Pax World Balanced Fund only requires $250 to get started—making money and making a difference.
“We’re way into making money here,” Feigenbaum says. “Green should make green.”
