Socially responsible investing

by Jaime Pfeffer

February 11th, 2008 in Business, Community, Environment

Consumers aren’t the only ones going green. So is Wall Street. Considering that a Social Investment Forum trend report found that mutual funds aimed at socially responsible investing increased from $12 billion to $179 billion in assets from 1995 to 2005, it’s no wonder why.

What characteristics do firms investing in socially responsible companies look for?

One thing is for sure: something they don’t look for is a company that is too green to be true. Touting positive strides is great, but being too perfect raises red flags — and says that something isn’t right. Instead, companies should promote transparency and balance.

The second item investment firms look for in making socially responsible investments is readily available information on the company’s green practices. Computer chip- manufacturer Intel accomplishes this through annual sustainability reports that it shares with investors via briefings that it holds around the country. The reports include things such as corporate responsibility results, goals, and green initiatives. In addition, Intel communicates its greenness with investors and analysts through a yearly corporate responsibility report, a blog, and newsletters.

Intel’s work has paid off: the company’s corporate responsibility quotient bests 87% of S&P 500 companies and 98% of its peers. Along with these positive attributes, Intel has led the tech market sector of the Dow Jones Sustainability Index for the past six years.