Socially responsible investing for the world

How to do well and do good with your financial planning.

by Ahouva Steinhaus

vents like the annual Earth Fair are a good opportunity to take stock of our values and priorities and move in some new directions, though there are always conflicting choices to make. Can we buy more green products without taking too much time to find them?

    Should we replant our gardens with water wise plants? Can we invest our funds in ways that won't contribute to more pollution and wasting of resources?

    As many generation Xers and baby boomers grow closer to retirement, setting aside money becomes a bigger priority. And making decisions about where to place it grows increasingly important. How can we create a personal course of action so that our deeds are more congruent with our values?

    There is an ongoing controversy about whether screening for socially responsible companies, or screening out irresponsible ones, limits our choices so much that performance is affected. The controversy may not be resolved anytime soon, but having spent over 20 years working with people and their investment decision-making, I can tell you that what really matters is to make choices that allow you to sleep well at night. This certainly has to do with matters of risk, but it also has to do with knowing where your money is invested, and if it is really supporting your best interests.

    There are several ways to screen investments to find those you can feel good about.

    Positive screens look for investments that have policies you support and create quality products that are useful, safe and environmentally sensitive. Positive screens include fair business practices towards employees of both genders and all backgrounds, community contribution and environmental awareness and practice.

    Negative screens would eliminate companies with policies or products you don't approve of, which might include tobacco companies, toxic waste producers, makers of weapons or producers of nuclear energy. You might also have particular screens based on your unique values.

    You might also look at ways to become a shareholder activist and get companies to change policies of which you disapprove. The Interfaith Center on Corporate Responsibility in New York keeps an eye on corporate business practices.

    You can also support investing in community development for cities and other areas of our country where the need is greatest. South Shore Bank of Chicago has been a pioneer in community investing, and Jewish Funds for Justice has a community development fund.

    What are some examples of putting your values to work? One of the financial advisory firms I work with has a portfolio that chooses to invest in companies that have a high impact on the planet for good. The companies they work with support alternative energy development, organic food, health of the non-pharmaceutical kind, and companies that try to solve problems about clean water and waste disposal.

    A simple way to be a socially responsible investor, even without a lot of money, is with an array of socially-screened mutual funds, many of which have great performance by any measure. The minimum investments for these funds can be as low as $500, and setting up an automatic monthly investment plan, for an IRA or Roth for example, can allow you to begin with even less (about $100 a month). These funds include Calvert Funds, Pax World, Parnassus, Ariel , Domini Funds, and Working Assets , and they all have web sites for you to research.

    Whatever you choose to do, use this Earth Day to examine your values and priorities, take some action steps now and keep track of your progress!

    Ahouva Steinhaus, M. Ed. is the financial services principal of Asiel and Associates and a board member of San Diego EarthWorks, host of the annual EarthFair in Balboa Park. She specializes in socially responsible investing and can be reached at 619-640-001 or 1-800-760-2840.