Socially responsible investing (SRI) is of interest to many of us who are troubled by the prospect of investing in certain firms -- such as those that sell tobacco -- or who just want to encourage companies to make the world a better place.
I love the idea of investing in only "good" companies. But as I've written before, I wonder whether they really exist. Think about people, for example. Are any of us really perfect? Not many, I suspect. Ralph Nader, for a long time widely admired, has seen a significant drop in the number of his supporters. Even Mother Teresa had some dubious political opinions, such as supporting Duvalier's dictatorship in Haiti. (An interesting tidbit: According to an article at americanbuddhist.org, when asked why she dedicated her life to the poor, the nun is said to have replied, "Because I realized that I had a Hitler within me.")
But enough digression. Forbes magazine recently ran a "Social Scorecard," which graded many of America's most admired corporations on diversity, community, human rights, and the environment. The grades ranged from A to F, and none of the 30 firms avoided earning at least one C, D, or F grade. In fact, only Johnson & Johnson
According to the findings by KLD Research and Analytics, Home Depot
Similarly, Wells Fargo
What an investor can take away from this list is that it's apparently hard to win on every count. Are would-be SRI investors doomed, then? Not at all. Consider focusing your attention on the issues that matter most to you and you'll have an easier time finding firms that deliver. Is diversity a chief concern? Look at General Electric
Learn much more about socially responsible investing in the articles below:
- The Myth of Socially Responsible Investing
- Bullish on SRI
- Dueling Fools: Socially Responsible Investing
- Socially Responsible Investing
- Socially Responsible Funds on a Tear
- More Sin in Sin Stocks
And share your thoughts on the matter on our Socially Responsible Investing discussion board. Or just drop in to see what others are saying. We're offering a free 30-day trial of our entire board community right now.
Finally, when searching for investing contenders, make sure you evaluate them as investments, not just as ethical organizations. Perhaps get some leads on promising companies from some of our newsletters (grab some free samples), and then look into their practices.
Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart, Home Depot, and Johnson & Johnson.