IMHO, Whole Foods (WFMI) is a great stock pick right now. I couldn't really find any other relatively low risk environmentally friendly stocks when I looked -- the problem is that most things are "emerging technologies" like wind/solar power and small companies are just too high risk for my retirement fund.

Investing in socially & environmentally responsible companies is the most important topic that we as Treehuggers face. If we cannot turn the market, then all of this is… everything we do here, is just posturing and fashion. I cannot tell you how strongly I feel about this…

PUT YOUR MONEY WHERE IT COUNTS.
Every time you buy, the whole world is watching!

Here’s some places to start:

http://sustainablebusiness.com/
http://www.calvert.com/
http://www.powershares.com/ (Clean Energy Port.)
http://www.socialfunds.com/
http://www.domini.com/
http://www.paxworld.com/

If you need help, PM me, ad I will do everything I can.

+++++++++++++++++++++++++++
Thank you Damien! How can folks get ahold of you? your email address doesn't come up on the comments...
Erin

I put $3K into an Ameritrade account a few years ago and bought:

Ballard Power-bldp (fuel cells)
Greenshift-gshf.ob (green portfolio)
Quantum Fuel-qtww (alternative fuel systems)
Hydrogenics-hygs (fuel cells)

I also bought Matsushita (Panasonic)-mc because they make the batteries for Toyota's hybrids.

"Thank you Damien! How can folks get ahold of you? your email address doesn't come up on the comments..."

It's on his TypeKey page.

Thanks Erin. I've posted my email below.

It would be great to somehow pool information on this topic, so Treehuggers could have an easily accessible and in depth resource list. Perhaps a monthly posting on investing? With a continually updated list of resources? It takes time to find all these resources… let’s make it easy!

damiensomerset@yahoo.com

Damien,

Perfect timing. I've had a chunk of cash sitting around for waaaay too long, trying to find the time to research something better than the usual mutual fund. I was about to just throw it into Vanguard yesterday since it's just sitting there, but now I'll check out your links and find something better. I agree - make it easy!
Thanks!

Jeez - 70% of you don't have ANY investments? No 401K, no savings? We are obviously doing a better job at consuming green than investing green. I am not sure what it means in terms of the long-term viability of our culture.

One of the first posters - Chris - is right, that many green stocks are speculative, especially in the energy sector. You should spread the risk either through a mutual fund such as WGGFX or an exchange traded fund like PBW.

Traditionally, green investing hasn't been the most profitable but the tide (in terms of investor sentiment and interest) is starting to turn.

Hi Erik: Speaking for myself, I'm living my conservation beliefs by working for a non-profit organization dedicated to helping protect sensitive natural resources. As an employee of a smallish non-profit, I don't take home a wad of cash every week or month or year. It's all about choices - do I choose to work someplace where I could make enough money to have some left over to invest? Or do I choose to work someplace where I make less but my job contributes to conservation? Do I buy locally grown, non-organic tomatoes? Or do I buy organically grown tomatoes which have to be shipped to my town? I'd like to think that the choices I've been making DO contribute to the long-term viability of our PLANET. I don't know about our culture.

I made out very well (so far) on Evergreen Solar, the New Alternatives Fund, and am taking a flyer on Spire Corp and Borealis (BOREF).

Here's my report on a solar stock talk from about a year and a half ago:

Michael Rogol, a PhD student at MIT, spoke on Wednesday, October 6, 2004 on "Solar Power through 2020: Potential and Challenges." He's a business consultant who has talked to most if not all of the major manufacturers of photovoltaics in the world, on both the CEO and plant level, in over 200 interviews. He reports that there seems to be agreement all across the board as to the near-term solar electric future. It was one of the best and most comprehensive talks on solar that I've experienced.

Solar has had 23 times growth in the last decade and is poised to have 25 times growth in the next. Solar electric has maintained a consistent growth rate of about 33% per year since 1994 which is rare in a business sector. However, there are great challenges that will have to be met by 2015 and after in order to maintain such levels of growth.

Last decade's growth is concentrated in the OECD, not the developing world. The vast majority of PV is grid connected and the major markets are Japan, Germany, and maybe California. 92% of the solar electricity installations in Japan are on rooftops and the figures are commensurate in Germany.

The price of PV has fallen by about 7% per year and has, until now, been passed on to the consumers. In the next few years, due to increased demand, all of those continuing price reductions will not be passed on to consumers meaning that the producers will be able to accrue profits.

The next decade looks good for solar because the residential grid price is increasing, the cost of solar is falling, the government incentives for solar are rising with $1 billion in Japan this year and about $500 million, half Federal and half state, in the US. What may become a difficulty is rising interest rates. A 3 to 5% increase in interest rates would be trouble. However, this is balanced by the fact that some government subsidies include locked in low interest rates. Another difficulty on the horizon will be the response of generating companies to solar peak shaving. Small peaks in demand tend to trigger much larger price increases. Solar shaves summer peaks and thus cuts demand and prices increase for generating companies. There is already an impact on Japanese generating company profits. At some point, they will have to react.

Solar electricity is already a $7 billion industry worldwide and the average cost is $7 per watt installed. $3 of that is module cost and the rest is the accompanying electronic controls, installation, design, licensing, and miscellaneous. Sharp's PV module business is $1 billion this year and will be $2 billion next year. It is their second largest growth platform after LCDs.

Solar accounted for about 4% of all refined silicon five years ago and now accounts for 25%. There are six companies that produce 90% of the world's refined silicon, 28,000 tons. They are beyond full capacity now and the prices are rising due to expanding demand in both the electronics industry and the solar industry. Silicon for electronics is more refined than that used for solar and some of the rejected electronics silicon is transferred to the solar sector, perhaps 10% of the total used in solar.

According to Rogol, new, non-silicon solar technologies will probably not be a factor in the next 10 years. There is no disruptive technology on the horizon. However, there is a huge investment in solar innovation, 10 times the R & D as the refining and power sectors. The bulk of this research is outside the USA. Rogol also believes that the adoption of solar electricity may follow the pattern of the adoption of bottled water in the developed world. Michael Rogol has issued an investment report based on his findings and is trying to define the most germane questions he can examine in his thesis. His email is michaelr@mit.edu and his investment report can be read at http://www.photon-magazine.com/news/ww%20ms%20Sun%20Screen%20Studie.pdf

I recently looked into shifting some of our investments into socially responsible funds, and was disappointed to find that most have fees that are many times the fees of index funds at a low cost provider like Vanguard or Fidelity - sometimes ten times or more.

For example, look at the Calvert Large Cap Growth Fund. The A class shares have a 4.75% load and a 1.55% expense ratio. The C class shares have no load and a 2.38% expense ratio. The Vanguard Growth Index fund has no load and a 0.22% expense ratio.

This may be an extreme example, but the least expensive socially responsible funds I can find are Domini's funds, which generally have an expense ratio of 0.95%.

There's a rule of thumb for retirees that says you can withdraw 4% of your initial portfolio per year (adjusted upward for inflation each year). If I use Calvert funds, about half of that 4% goes to Calvert and the other half to me. That's a big deal! With the Domini, it's closer to a 1/4 - 3/4 split, which is still a big deal if your retirement income drops from ~$40K/yr to ~$30K/yr.

I'm willing to pay extra for socially responsible investing, but it may be that with current choices I can do more good by investing in index funds and using the proceeds to shop at local co-ops, farmers markets, and otherwise buying and living "green".

I also invest heavily in green stocks. Most of my investments are in funds like WGGFX and ARGFX, both being green, socially responsible funds. About 20 percent of my portfolio is invested in what would be termed high risk plays like PLUG (fuel cells) IESV (bio fuels) MKBY (onsite wind) STKL (organic foods and other environmentally friendly goals). There is high risk of course in emerging technologies like this, but I feel it is important to help usher them into the future, but at the same time, I invest a fairly low portion of my portfolio in them.

MCM, index funds are passively managed and will always have lower management fees than actively managed mutual funds (green or not).

Until we have some kind of green index that can be shadowed by a green index fund, I doubt that will change...

MGR - you're right, I should have been using an actively managed fund for comparison. Still, there are many fine actively managed funds with expense ratios below 0.50%. For example: Vanguared Growth & Income (0.40%), Vanguard Tax-Managed International (0.20%), or Vanguard Windsor II (0.35%).

My point is that these funds are fairly expensive to own, and the Calvert funds in particular are extremely expensive. If you can afford it, that's great. It is not clear to me that the planet is better off if I send 20-50% of my post-retirement income to Domini or Calvert, or if I use that money to purchase the (often more expensive) "greener" versions of the goods I buy, donate to charities, etc.

However, in researching this, I came across the Vanguard FTSE Social Index, with a 0.25% expense ratio. My understanding is that this is a "lite" version of the socially responsible funds, in that it does not participate in shareholder activism or otherwise try to influence the companies that it holds. That said, it looks like an affordable way to get exposure to large-cap growth stocks while screening out some of the least socially responsible companies.

With regards to cost, PBW tracks a clean energy index and is therefore fairly inexpensive. It's a stock so you just pay a stock transaction fee at your brokerage. I think I paid $25 to get into it on E*TRADE. Here's the blub:

"The investment seeks investment results that correspond generally to the price and yield, before the Funds fees and expenses, the WilderHill Clean Energy Index. The Fund will normally invest at least 80% of its total assets in common stocks of companies engaged in the business of the advancement of cleaner energy and conservation. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Clean Energy Index."

WGGFX is a green mutual fund and again I found that I could get into an unloaded share class through E*TRADE. Here's the specs, which may be only applicable to this share class.
INVESTMENT MINIMUM
Initial $5,000
IRA $2,000
Subsequent $250

FEES & EXPENSES (%)
Maximum Front-End Sales Load 0.00
1st Year Red. Fee 0.00
Management Fee 0.90
12b-1 Fee NONE
Expense Ratio 1.45
Peers Exp. Ratio 1.62

Erik - PBW has an "expense cap" of 0.60%, which I interpret as the expense ratio. You're right, that's pretty decent for such a specialized ETF; I might buy some of that.

FYI, WGGFX's expense ratio of 1.45% is about 50% higher than Domini's funds.

Thanks for the pointers!

MCM,

Although expense ratios are important, overall performance is MORE important. Who cares if the expense ratio is 1.5% vs .75% IF the former goes up almost 60% in 5 years vs. breakeven in 5 years (those are the relative performance comparisons of WGGFX vs DSEFX)? Social funds won't get any interest unless they have overall performance that compares favorably with the rest of the mutual fund marketplace. MCM, I'm not arguing with you - only saying that the comments above have talked a lot about expenses when that is one of many, and one of the least of a person's investment concerns.

Hey Folks - just came across this in Business Week today: http://www.businessweek.com/investor/content/apr2006/pi20060413_693178.htm

Funny. Just today i was asked this question and made a post on my site including some helpful links to start with...in the U.S.

I have been investing in socially responsible companies for years, mutual funds,IRA and individual stocks. I am looking to invest in some other companies but want to learn more about them...how green they are, how they treat their employees, etc. How can I find this information?
Also...how about investing in biodiesel?
J

Excellent thread. As a green investment advisor who puts his clients 100% in socially conscious holdings, I thought I'd chime in. There are 200 socially responsible funds (with varying shades of "green"). A nice overview of the industry can be found in the Social Investment Forum's 2005 Trends Report, which can be downloaded at www.socialinvest.org.

For people looking to get started without an advisor, it's important to diversify your holdings. Mutual funds allow for that, but you may also want to diversify funds so as to get different sectors represented (not just renewable energy, for example). There are also socially responsible bond funds, which behave rather differently from equity funds. There are also community investments in credit unions and loan funds which provide marginalized people access to capital (such as folks rebuilding in the South since Katrina). Another potential resource for do-it-yourselfers is our firm's book, "Investing With Your Values", provides a nice overview of the field (you can get used copies on Amazon since it's out of print). Hope this is helpful.

Michael Kramer, Accredited Investment Fiduciary
Natural Investment Services
www.NaturalInvesting.com

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