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.

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