With social and environmental issues at the forefront of public awareness, it's no surprise that people want to invest their money in ways that reflect their values. Yet as my esteemed opponent and colleague Joe Magyer points out in his bear argument, modern living makes it hard to follow through on your wishes. Just as it's hard to find vegan food in most restaurants, it's difficult to identify companies that do everything perfectly.

Know your values
But that doesn't mean you shouldn't try. The idea that corporations are responsive only to the wishes of their shareholders is a dated concept. Many corporations have long recognized their obligations to other groups with stakes in their businesses, including employees, the communities where they operate, and most importantly, their customers. In industries that have historically had terrible track records of environmental damage, companies such as Freeport McMoRan (NYSE:FCX) have devoted resources toward reducing the environmental impact of its mining operations. Even much-maligned Wal-Mart (NYSE:WMT) has recognized the value of getting on the green bandwagon, by pledging a $500 million investment in greenhouse gas reduction, along with initiatives to implement solar power and reduce packaging waste. It's clear that these companies believe that social awareness is consistent with their duty to their shareholders.

The key, though, is knowing what you want to support as an investor. Joe correctly notes that with socially responsible mutual funds, you have to look closely to identify exactly what criteria funds are using to determine what companies pass their test. Some funds simply choose a group of companies it thinks are offensive, such as tobacco and alcohol companies, while leaving the door open to other companies that don't necessarily have perfect track records. Other funds choose companies more proactively. There's no right answer for everyone -- it all depends on your own beliefs and values.

Attack from every angle
It's too easy to paint people who are socially aware as hypocrites. Sure, you'll probably never be able to eliminate every impact you have on the environment. But does that mean you should ignore your actions entirely?

Some people find it easiest to contribute toward the causes they believe in by making informed choices as consumers. Others raise awareness of social issues in the hope that focusing attention will entice powerful government and corporate leaders to take meaningful action. Even on the investing front, some investors leave questionable companies out of their portfolios entirely, while others buy shares but propose resolutions at annual shareholder meetings that address their concerns for their company's activities. Each method has had its successes and failures, but together, they make a real difference.

Be proud, but stay Foolish
As easy as it is to be cynical about social issues, socially responsible investors can already chalk up a number of successes. In addition to those mentioned above, Coca-Cola (NYSE:KO) has recognized the value of building its customer base in the developing world by pledging to be a responsible corporate citizen in a number of areas, including education, the environment, and sustainable growth. General Electric (NYSE:GE) has made huge donations toward education and disaster relief, in addition to spending huge amounts of money on its Ecomagination campaign to come up new innovations in technology to address world concerns. Ford (NYSE:F) has responded to consumer demand for energy-efficient vehicles by ramping up its green offerings. The list goes on and on.

As with any investing decision, of course, you have to do your due diligence. Inevitably, there will be some firms that seek to use the mantle of socially responsible investing for their own personal gain. If you're considering a socially responsible fund, it pays to apply the same Foolish principles you'd use with any mutual fund. If you find high fees, turnover rates that will create significant tax problems, or a history of underperformance, then look elsewhere. There are plenty of good funds out there, so there's no reason to pick a mediocre fund just because it has an SRI label.

So on Sunday, celebrate Earth Day with the rest of the world, but don't despair. Even with all of the challenges we face, we're making great strides toward solving them, and we've only just begun. By putting your money where your values are, you're doing your part toward making the world a better place.

Coca-Cola and Wal-Mart are both Motley Fool Inside Value recommendations. You can see what other undervalued firms analyst Philip Durell has tapped by taking a free 30-day trial. Fool contributor Dan Caplinger has wishes you and yours a happy Earth Day. He owns shares of Freeport McMoRan. The Fool's disclosure policy is accountable to you.