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Most investors would prefer, if given the choice, to put their money where their beliefs are. But this is easier said than done. One of the challenges to being a socially responsible investor is that it sounds good in theory, but in practice it can take you in many different directions. It’s important to understand your own values and priorities so you can invest accordingly.
Recently, I highlighted one approach of investing in companies that invest in people. This piece focuses on companies that have elected to raise the minimum wage for their workers above the government minimum.
Here’s another approach: Invest in companies that invest in the planet. If you’re like many people you’re probably thinking about companies that make solar panels or some other sort of renewable energy. But while generating energy from renewable sources is one important way to benefit the planet, there are scores of others.
Now, to the extent that so-called green stocks are working in up-and-coming or unproven sectors, they may be inherently risky. But if you can find established businesses that are expanding into these green and environmentally friendly sectors, you’ve found a way to lower your risk.
Here are some businesses that have been doing pretty well by both investors and the planet:
Sustainable Forestry: Weyerhaeuser Co. (NYSE: WY)
Trees are the life force of the planet, and wood and paper manufacturer Weyerhaeuser has managed its forests to ensure trees are harvested with minimum disruption to the environment. One hundred percent of its forests are certified to sustainable forestry standards – a distinction reserved for only about a tenth of forests worldwide.
Last year it planted 97 million trees, almost twice as many as it planted in 2010. It’s been a turbulent year thus far for Weyerhaeuser shares – as it has been for many stocks – but Weyerhaeuser shares are up more than 70% over the past five years. The business’ fundamentals are strong and Weyerhaeuser pays a generous 4.1% dividend to boot.
Organic Food: United Natural Foods Inc. (NASDAQ: UNFI)
Just because you enjoy organic food and believe in organic farming principles doesn’t mean it’s easy to invest in this sector. A lot of so-called naturally produced food is grown by small farms and sold at local farmers markets that are not publicly traded.
United Natural Foods offers one option for investors. It distributes about 80,000 organic and specialty foods and supplements to major supermarket chains and smaller retailers. The company’s stock movement has been choppy, but its sales and earnings growth has been steady in recent years. Just last week, it increased its forecast for fourth-quarter revenues, which are expected to rise about 17% to more than $2 billion.
Energy Efficiency: Acuity Brands (NYSE: AYI)
This manufacturer of lighting systems is increasingly focused on products that promote energy efficiency, both by consuming less power and by using advanced controls so they can turn on and off with demand rather than burning continuously.
Cities and municipalities around the country have adopted its products to save power, as have businesses, hospitals and universities. As an established business with 7,000 employees and annual revenues of almost $2.4 billion, Acuity Brands is doing more than peddling an unproven technology. As such, it stands to continue to grow as more businesses and governments seek to use electricity more efficiently.
Wars will be fought over this
Over the last 15 years, one resource has caused more than 500 conflict-related events…11 of which have turned violent. What’s more, the British non-profit International Alert estimates that there could be 46 conflicts within the next 10 years…all related to this scarce resource. And some of the wealthiest insiders—Warren Buffett, Goldman Sachs and JP Morgan—are moving to profit from it right now. Go here to get the full story.