Living Green: The Missing Manual

Environmentally Responsible Investing

Whether you're saving for retirement or growing your nest egg, you want to invest your hard-earned money in companies that respect the environment. Socially responsible investing (SRI) has been around for a while. It's a strategy that takes investors' ethics and values into consideration, with the two-pronged goal of getting a good financial return and supporting companies that do some good in the world.

SRI focuses on companies that work in an environmentally responsible way, respect human rights and indigenous peoples, and deal fairly with employees and consumers. Some—but not all—SRI funds also avoid companies involved in controversial industries like tobacco, alcohol, weapons, and gambling. So if you object to certain kinds of businesses, be sure to research the SRI funds you're considering to make sure you're not investing in something you oppose.

There are several ways you can invest responsibly:

• Mutual funds. Socially responsible mutual funds are made up of securities from companies that act in accordance with certain ethical, moral, or religious values. Green mutual funds hold stock in businesses that protect the environment and/or in forward-looking companies that are working on solutions to environmental problems, such as clean energy. To start your research into green and socially responsible mutual funds, spend some time on the Social Investment Forum (www.socialinvest.org), a nonprofit association of financial services professionals ...