Free Financial Today

By Evan Brown

You changed all your light bulbs to fluorescents. You bought a Prius. Everything you own is made from recyclable materials, and all of your produce is organic and locally grown. Yet when you go to check how your stocks are doing, you realize you’re portfolio is a who’s who of polluters and poor corporate citizens.

Fortunately, brokerage firms and financial consultants are increasingly feeling your pain. For those looking to extend the same eco-friendly standards to their stocks as they already do to their shopping, there are ever more financial products and services catering to people who no longer want to support companies they differ with philosophically, but still want a solid investment with healthy returns.

It’s called socially conscious or socially responsible investing – - SRI for short — and the practice has actually been around for more than 20 years. There are as many variations on SRI as there are investors, and it’s not limited to environmental issues.

Religious organizations and nonprofits often seek out investment opportunities in line with their views, and eschew those that aren’t, meaning that one institution could choose to dump a company’s stocks because of its support for pro-choice causes, while another might want to invest in that company for the same reason.

However, sustainability is “in” across all segments of society, and with an ever-growing portion of the investing class looking to support sustainable practices as much in the stock market as at the corner market, there has been a dramatic increase in the number of funds and firms moving to fill the need.

According to Investment News, SRI mutual funds, many of which are dedicated to the “green sector” contained more than $2.2 trillion in assets as of 2008, up from less than $500 billion in 1996. Despite the recent turmoil of the markets, the long-range trend is not likely to abate.

“(SRI) is important to the base we work with,” said Susan Ernsky, senior vice president and portfolio manager at Tucson-based Mission Management and Trust. “On the institutional side, we have a niche working with religious organizations. Some are very affirmative, where they want to vote their proxies, talk to the boards. Others aren’t quite as active.”

Ernsky said the demand for screening stocks based on socially responsible criteria remains stable at her company, with a small but growing percentage of Mission’s clients routinely requesting stocks be screened for ideological conflicts. As a sign of the times, Ernsky said there have been discussions at Mission about the possibility of offering funds or portfolios specifically geared to its clients interested in SRI, though that hasn’t happened yet.

Still, though, Ernsky said she has noticed that fund managers are starting to screen stocks more and more for compliance with their clients’ attitudes.

One Arizona company that provides the service exclusively is Invest Green, a firm based in Phoenix that was founded in 2006. Invest Green operates under the mission statement to “help socially conscious investors navigate the universe of stocks, bonds, mutual funds, ETFs and insurance products to custom design a financial strategy that reflects both personal values and financial goals.”

And, according to founder Paul Mosier, the strategy is working.

Mosier, who had been a financial consultant with ING and later AXA Advisors, said he left AXA in the beginning of 2006 to start Invest Green in response to what he saw as a niche that wasn’t adequately being filled. Mosier said that a number of his clients were “laughed at” by their previous advisers when they broached SRI, and were told they would never make money at it.

Three years on, Mosier has seen his business continue and expand.

That is the key question for many investors, though: “Can I go green and still stay in the black?”

“Honestly I think that any sort of green, socially-conscious venture will give you pretty good ROI (return on investment), especially energy,” said Martin Reed, managing partner at Green Giants Consulting, an outfit that helps Tucson-area companies adapt their business models to achieve sustainability. Reed, who holds an MBA from the University of Arizona’s Eller College of Management, has conducted extensive research into green investing, and said now might be the perfect time for investors to enter the SRI sector.

“Everything took such a hit last fall you can pick up equity or shares at a pretty discounted rate,” said Reed.

For instance, Winslow Green Growth, a mutual fund with an all- eco-conscious portfolio, was a market leader for much of the decade, growing at an average annual rate of more than 30 percent, until its value plummeted along with the rest of the stock market in the fall. It is now valued at less than it was when it debuted in 2004, but market analysts don’t expect it to stay depressed.

“This is the general direction everybody knows we need to move into,” Reed said. “If given a long enough timeframe, renewable energy and socially responsible investments are a sure bet in my opinion.”

Reed said investing one’s conscience is getting easier, as more and more corporations see the value of portraying themselves as responsible corporate citizens.

However, he cautioned, “It requires a little bit of due diligence, a little common sense. If a company donates

$1 million to preserve the rainforests and then spends $50 million on an ad campaign telling everyone about it, it’s easy to see where their heart is.”

“Everyone needs to do their own research and do what’s best for them, but there are lots of opportunities if you look,” said Reed.

Originally published by Evan Brown.

(c) 2009 Arizona Capitol Times. Provided by ProQuest LLC. All rights Reserved.

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