When making a trading or investing decision, there’s more to it than just looking at the bottom line profit of a company, or finding the most attractive technical chart.

More than just making money

Looking out for stocks which are undervalued, have exploding earnings growth, and display excellent technicals are a gem, which can potentially make you a lot of money. But if the companies you are investing in are damaging to people or the environment then maybe you might like to take a step back and think about what your investment is funding.

Socially Responsible Investing (SRI), or green investing is a type of approach investors and money managers can take to create a share portfolio which only includes investments which are environmentally friendly and ethical, which serves to benefit society for the greater good.

Look for moral and profitable investments

Those that would take a Socially Responsible Investing approach would avoid investing in companies that are related to manufacturing tobacco (British America Tobacco Australia), alcohol (Fosters), are involved in gambling (Aristocrat Leisure, Crown Casino, Tatts Group), create pollution (Bluescope Steel & Onesteel), and damage the environment (Gunns). Furthermore, companies which exploit their employees or labor practices, or treat people poorly are also avoided.

Instead, companies which have focus on human/animal rights and protect the environment are likely to flourish because while we have an aging and growing population, we are seeking new renewable sources of resources and energy, and it’s a no brainer that funding these investments are likely to bring competitive investment returns. 

After all, it makes sense to take this investment approach because in the longer run, unethical investments which can be socially or environmentally damaging are unlikely to last. So even though you may be screening for “green” or “ethical” investments, it does not mean that you cannot achieve great returns.

Screen for green

For example, renewable energy stocks such as AGL Energy (AGK) claim to fight climate change, reduce emissions, provide green energy products and invest in renewable energy generation. These are characteristics which socially responsible investors would look for.

Other green stocks include Geodynamics (GDY) and Infigen Energy (IFN) which produce renewable and clean energy, Sims Metal Management (SGM) which recycles metals and Brambles (BXB) which recycles wood for pallets.

If you’re the type of investor who have values which are aligned with socially responsible investing while looking for a sustainable long term investment, then take this active approach to make a positive contribution to the world.