The next step in the green revolution—after buying a hybrid, showering with a friend and turning off the lights, requires socially responsible investing or SRI in green terminology.
“Not with my money,” you say. I understand your dilemma. SRI is neither profitable nor environmentally friendly in many instances. Investing in an environmentally friendly company may cost you, considering these companies demonstrate poor return on investment, compared to say: tobacco, alcohol, oil drilling and firearms.
Historically, these sinful industries have made investors rich and continue to out pace the bio tech, communications and infrastructure industries. Something else to consider when investing in a SRI, are these companies green on the outside and black on the inside, are they cashing in on the green PR craze while exploiting labor in some third world country. They may be conglomerates with diversified companies on both sides of the environmental fence.
You may be a SRI and not even know it. The majority of SRI investment funds are managed by institutional investors. It’s a safe bet that if your investments are managed by a public pension fund or religious organization, it may be costing you returns for their virtuous idealism.
Market indicators demonstrate that you will see healthier returns providing you invest in more traditional markets; companies with proven track records that continuously out pace collective fads, providing of course you can live with yourself the day after tomorrow.