How to Engage in Socially Conscious Investing

Joel Anderson  |

Investing can often be a cold-hearted affair. In the pursuit of greater returns, many people are more than willing to overlook their moral concerns about a company as long as it's bringing in the big bucks. Apple (AAPL) painted a clear picture of this recently when revelations about the conditions in the Foxconn (HNHPF) plants making its iPads and iPhones came to light.

However, just like consumers can express their beliefs through the purchase of certain products, an investor can wield their own power in what companies they choose to invest in. Losing customers is one thing, but having investors drop out is the sort of thing that can really make a company sit up and take notice. As such, here are some socially conscious companies and ETFs that one can think of investing in if you're looking to make your money speak.

Obviously, socially conscious is going to mean a number of different things to a number of different people, so each individual investor should fine tune their approach to say precisely what they want to, but these tickers could be a good starting point.

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ETFs for Socially Conscious Investing

For those interested in a broad spectrum of companies that are good corporate citizens, iShares offers two ETFs that take a wide variety of companies from across different sectors and industries and that all show strong social responsibility. The MSCI KLD 400 Social ETF (DSI) contains over 400 different stocks for companies that have rated high on issues like the environment, corporate governance, and social concerns. The MSCI USA ESG Select Social ETF (KLD) focuses on those companies that outperform their competitors on these issues.

Among the companies most prominently featured in the KLD 400 are IBM (IBM), Microsoft (MSFT), and Procter & Gamble (PG).

Investing and Environmental Concerns

One of the major issues facing our society today is the environment, and often times this personifies itself in a conflict between economic growth and caring for the future of the planet. However, this doesn't have to be the case as there are any number of companies that either act in an environmentally responsible fashion or are creating products and technology that are geared towards a cleaner, greener tomorrow.

One valuable resource is Newsweek's green rankings, which tracks the 500 greenest companies in the United States and globally based on criteria developed with Trucost and Sustainalytics, two leading green research firms. Topping last year's list was Dell (DELL), Hewlett Packard (HPQ), and IBM. Another way to go is to invest in ETFs tracking industries that are promoting green technology, like the PowerShares WilderHill Clean Energy Profile (PBW), of the Guggenheim Solar ETF (TAN).

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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