Investing for Change: Beyond Renewables

More and more investors are choosing to integrate social and environmental factors into their stock selection process. Their reasons for doing so vary: Some see it as an ethical obligation, others as a risk mitigation strategy, still others as a value-creating proposition. The challenge is that many people don't know where to start.

John Vechey of PopCap Games recently joined The Motley Fool for a climate change summit. Among his guests were Stu Dalheim, vice president of shareholder advocacy at Calvert Investments, and Todd Larsen, director of corporate responsibility for Green America. In the following video, Stu and Todd discuss ways that private investors can begin to make their portfolios more sustainable.

Both speakers recommend a broad approach, rather than focusing too narrowly on individual factors and missing the forest for the trees. Stu mentions two areas where he sees opportunity for future growth: water and energy efficiency.

If we look at Calvert Investments' top holdings in its global water and energy funds as of the end of June, we see some interesting names worth consideration. This would have been a nice little basket to hold over the past decade. Note that this in no way "proves" that sustainability adds value. That is very difficult to quantify, and much work has been done in that area. These are just the numbers I got on the first set of tickers I chose with the first time horizon I selected -- 10 years.

Company

Market
Cap 7/30/03 (Billions)
 

Share Price 7/30/03

Starting
Price
Without Dividend Adjustment
 

Share Price 7/29/13

% Change 

Unadjusted % Change

Eaton
(NYSE: ETN  )

$10.05

$16.19

$21.03

$67.62

317.6

221.5

Flowserve
(NYSE: FLS  )

$0.9

$5.93

$6.39

$56.36

850.4

782

Johnson Controls (NYSE: JCI  )

$10.9

$13.22

$16.02

$41.09

210.8

156.4

Companhia de Saneamento Basico (NYSE: SBS  )

$1.04

$0.95

$1.55

$10.39

993.6

570.3

Xylem (NYSE: XYL  )

$3.87

$23.57

$24.25

$28.46

20.7

17.3

Watch the following video to learn more about strategies you can use in your own investment approach.

It's impossible to invest sustainably without giving a lot of thought to natural resources. You owe it to yourself to discover the most precious resource in the history of the world. It's not gold. Or even oil. But it's more valuable than both of them. Combined. And here's the crazy part: One emerging company already has the market cornered and stands to make in-the-know investors boatloads of cash. We reveal all in our special 100% free report "The 21st Century's Most Precious Natural Resource." Just click here for instant access!


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