Environmentally Friendly Investing

by Justin Weinger on February 11, 2007

It looks like investing for green now has a double meaning.

A couple of years ago, if you would have asked someone about “green investing” they probably would have told you that you were just trying to make some cash.  Today, “green investing” not only means investing to make money, but to invest your money in an environmentally friendly way.

So, how can you get in on this type of investing?  Aside from investing in mutual funds that specialize in these sorts of companies, it seems like there’s really one of two ways for you to invest your hard earned money “greenly”:

  1. Invest in companies whose sole purpose is to be environmentally friendly – i.e. companies that focus on recycling, research and development of renewable/alternative fuels, etc.
  2. Invest in companies who have put significant resources into making sure they do business in the most environmentally friendly way possible – i.e. making their offices more energy efficient, encourage their employees to telecommute, etc.

Now that you know where to start, how do you go about finding these sorts of companies?  Listed below (in no particular order) are some simple things I have done in the past in order to identify companies that are doing things a bit greener than their counterparts.

  • Keep up to date with current events.  Frequently checking out sites like Treehugger and Hugg are great places to find stories on environmentally friendly companies.
  • Keep your eye open for environmentally friendly products when you’re out shopping.  In most cases, companies that are willing to put out environmentally friendly products tend to be environmentally friendly companies!
  • Remember that industries such as oil, logging, home building, etc. probably aren’t the best places to start your search.

Keep in mind, just because a company does things in an environmentally friendly way doesn’t necessarily make them a good investment.  Please make sure that you do a good job of researching each company (meaning you have to put in the due diligence) before you decide to invest in them. 

There’s no point in investing in a green company if it’s not going to give you a good return on your green!

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{ 2 comments }

Graham February 19, 2007 at 12:12 pm

Investment is about using the eight wonder of the world, compound investing, to take today’s money and make it so much more over time. Ms or Mr Smith in Main St USA can do much more than simly look out for product. Understandign the way this market capitalism works, Ms Main St should DEMAND more options for investing in a way that does not price the environment nor future generations at no or marginal value. 10 years ago, organic tomatoes were nowhere to be found, and compact flourescent lights were like hen’s teeth. By demanding more”green” or enviro-valuing investments from invesment advisors, and the products they sell, will send the right market signals.
GS
http://sri-extra.blogspot.com

brian.carr February 19, 2007 at 2:21 pm

Thanks for the comment. I agree that putting our money towards environmentally friendly products will probably get better results than investing in environmentally friendly companies. That being said, what’s the point in buying environmentally friendly products and investing in environmentally corrupt companies?

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