GREEN LCA - ASK ECO-GAL
Tips for GREEN Investing
BY "ECO-GAL" Mayre Press
During Earth Month, April 1-30, everyone seemed to jump on the green bandwagon. Here’s an interesting thought…how many "greenies" are willing to put their money where their mouth is? We’re talking about green investing. Whether it’s an employer’s 401(k), an individual retirement account (IRA), mutual fund or stock portfolio, there are choices you can make to keep your investments in line with your values.
What exactly is green investing? James Brewer, a financial advisor with Ameriprise Financial Services, Inc., defines it as, "Being conscious of not only the financial ramifications of your investment decisions, but also the effect that your decisions have on the environment."
Some of you may be familiar with Socially Responsible Investing (SRI) and wonder how that differs from green investing. Brewer explains that, "SRI is an investment strategy that integrates social or environmental criteria into financial analysis. Every investment that is considered "socially responsible" may not have specific screens for environmental investing. Green investing encompasses seeking companies that either have a positive record for being environmentally friendly or that are engaged in business that help the environment, such as alternative energy development."
In this context, the term "screen" refers to the inclusion or exclusion of corporate securities in investment portfolios based on social or environmental (green) criteria. For more information on social responsible mutual funds, visit the Social Investment Forum, www.socialinvest.org, which has a primer on SRIs.
Social funds typically screen for these criteria: alcohol, tobacco, gambling, defense/weapons, animal testing, products/services, environment, human rights, labor relations, employment equality and community investing. A fund’s response to the outcome of these screenings could be: no investment, restricted investment, positive investment or no screenings (for this criteria).
If you are inclined to "think globally, act locally," take a look at Ariel Capital Management, LLC, www.arielmutualfunds.com, with its corporate headquarters in Chicago. Ariel believes that one of life's greatest lessons also holds true when investing: slow and steady wins the race. When looking for investments, Ariel examines whether a company takes positive steps toward preserving the environment or if it is a defendant in any environmental cases.
The Calvert Group, Ltd., www.calvert.com, one of the better-known SRIs, also screens for green issues. Its current environmental analysis focuses on climate change, corporate sustainability and performance, environmental governance and management, life-cycle impacts and resource impacts.
Even if you’re a seasoned investor, you might need help navigating the ever-changing currents of the investment world. Finding a green financial advisor can be a tremendous help. That’s when Co-op America’s National Green Pages™ can be a useful tool. Co-op America is a not-for-profit membership organization founded in 1982. Its mission is to harness economic power—the strength of consumers, investors, businesses, and the marketplace—to create a socially just and environmentally sustainable society.
Green investment funds featured here represent two of the dozens of SRIs. Publication of this material does not represent an endorsement of any investment fund or membership group.
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