Long before I started working at the Fool, I was a member of a dark and sinister group that is universally reviled throughout the Western world. I was a smoker. I used to smoke about half a pack a day, and each year I would make an unsuccessful attempt at quitting.

Then one day, it hit me. Why should I pay my hard-earned money to a company whose product was slowly killing me? That insight helped me quit cold turkey in January of 2000, and I haven't smoked a cigarette since. (I credit Allen Carr's The Easy Way to Stop Smoking with providing the helpful insight).

In this case, I chose to be socially responsible to myself, but the story has wider implications as well. Why would consumers want to buy products that they consider harmful to themselves or to others? And why would an investor want to become a part-owner of such a company? With thousands and thousands of public companies out there, it's easy enough to find companies that share your own view of the world. I've never been able to understand the guy who says, "I don't smoke (and God help my kids if they ever do), but Altria (NYSE:MO) pays a good dividend, a portion of which I give to the American Cancer Society." It seems like wasted energy to me. Why not invest in an equally profitable company, and donate a portion of those proceeds to charity?

For me, socially responsible investing is about aligning one's values with the companies he or she chooses to invest in. And make no mistake: Such a simple act can bring about real change. The ordinary individual has a lot more power -- as a consumer, as an employee, and as an investor -- than most people think. If you don't believe me, listen to the following remarks of some of the biggest boosters of creating a more socially responsible business environment.

Abbie Hoffman, CEO
One recent do-gooder wrote that we need to develop "wind and water technologies that provide renewable energy and clean water," and that we must create "more energy-efficient products such as hybrid locomotives, gas turbines," and other appliances. Another bohemian organization spoke of supporting "economic, environmental, and social progress" while committing ourselves to "human rights and freedom of association." Blah, blah, blah. Who wants to hear about investing from a bunch of shaggy-haired hippies?

Ummm ... actually, the first quote comes from General Electric (NYSE:GE), and the second one comes from ExxonMobil (NYSE:XOM). Both companies now provide "Corporate Citizenship Reports" that are easily viewed on their websites. Critics of SRI might think it a waste of time for investors to try to influence corporate America. Those in corporate America, on the other hand, seem to be making quite an effort to let everyone know that they are listening.

Go ahead and see for yourself. ExxonMobil, General Electric, Wal-Mart (NYSE:WMT), and Nike (NYSE:NKE) all have major initiatives aimed at convincing stakeholders that they really, really care about the environment, human rights, and that vague and popular notion of sustainability. Let's be clear, though: Wal-Mart doesn't give a flying fig whether or not I buy its shares as an individual. But it certainly does care what a large mutual or pension fund thinks. For better or worse, money talks in our culture.

Big money speaks
One pension fund that has been able to exert a significant influence over large public companies is the California Public Employees' Retirement System (CalPERS). With approximately $175 billion under management, this fund has been able to call attention to a number of corporate-governance issues. On a smaller scale, Motley Fool co-founder Tom Gardner has been attempting to use the power of the Motley Fool Hidden Gems community to attempt to influence several of his newsletter selections. Will shareholder activism change the world? As the Chinese leader Zhou Enlai once said when asked about the significance of the French Revolution: "It's too soon to tell."

So what's the downside to aligning your values with your investments and trying to bring about real change? Lower returns? Nope. Most studies show that SRI funds perform just as well as traditional funds do. In fact, one well-known socially responsible index, the Domini 400 Social Index, has actually outperformed the S&P 500 since its inception in 1990. And the SRI fund selected by Shannon Zimmerman of Motley Fool Champion Funds has outperformed its index by more than 7 percentage points since it was recommended last February.

So in my opinion, there is no downside to an SRI strategy. For those who disagree and would prefer to separate their investments from their good works, don't forget our Foolanthropy campaign this Christmas. There are many ways to build a better world for our kids and grandkids, and our charity drive is one of the better ways.

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John Reeves does not own shares in any of the companies mentioned. He'd like to buy ExxonMobil, but he is not quite clear about the company's stance on global warming. The Motley Fool is investors writing for investors.