With our national recession seeming to lift ever so slightly, many Americans are curious about the best means to invest after four years of market-shyness. While we were all plenty burned by the 2008 crash, with a slow turnaround there remain many sectors in which to place your investing dollar. A slowly rising tide can sometimes lift all corporate boats. That being said, for those with their eye on the health of our planet, some companies are more responsible than others.
An ethical investor can come in many stripes. Personal charity is, of course, an investment in both the planet and ourselves. Greenpeace, Amnesty International, Doctors Without Borders, all do tremendous work to advocate for our common humanity. However, at the end of the day, even those of us with the clearest eye for the human condition need their own personal holdings.
A true pacifist will naturally be hesitant to invest in the holdings of major defense or security companies. Lockheed Martin, Booz Allen, and Raytheon are all well respected companies with strong market histories, but their engagement in the aerospace and military sectors might make some investors uncomfortable.
Similarly, environmental investors will be deeply skeptical of energy or utility companies. Oil titans like BP, Exxon Mobil, and Chevron are all sound considerations on the basis of investment return. That being said, in terms of their attitude towards our ecosystem the blood (or, more appropriately, runoff) is all over their hands. No truly environmentally conscious citizen could feel at ease supporting a petroleum Moloch like Exxon.
That being said, there are many ways you can be both a shareholder and a citizen of this planet. While it’s rare to find any major corporate entities without some dirt on their records, some have much cleaner attitudes towards humanity and environment. Even more impressive, many of these companies divest some of these earnings towards genuinely compassionate causes. Here are some of the categories of company in which one may feel safe in holding stake:
Technology and Research
While there’s no doubt that Apple (NASDAQ:AAPL) has been an astounding growth success story, there’s also no doubt that its overseas manufacturing is deeply unethical. The conditions in Apple’s Foxconn factories have been loudly reviled, with spontaneous worker suicides staining the company’s reputation. Myriad reports point a deeply bleak picture of the conditions, with the shiny whiteness of both the company name and their handheld products looking much less pristine than before.
However, many technology players tend to have a much more responsible attitude towards our planet and the people within it. In opposition to Apple, Google (NASDAQ:GOOG) is much more heavily cloud computing and internet based, and has significantly less of a manufacturing footprint than Apple’s monolithic supply structure. One of the other particularly admirable aspects of Google’s corporate culture are their philanthropic leanings. Founding CEO Steve Jobs was vocal (and subsequently notorious for it) about his refusal to invest Apple’s mammoth earnings in humanitarian or philanthropic efforts.
Google’s phenomenal growth since its pre-recession IPO has slowed little, and the company continues to be an exceptionally strong holding to this day.
Google isn’t the only technology player that emphasizes culpability and responsibility. Whether or not you’re convinced of the endurance of its business model, Facebook Inc. (NASDAQ:FB) is similarly light in its manufacturing and environmental footprint. Not only is it similarly internet-centric, but CEO Mark Zuckerberg was vocal in both his participation in, and support of, Bill Gates’ ‘Giving Pledge’. Facebook has also served as a key recruitment and networking tool for NGOs, and partner platforms like Causes are used in motivating nonprofit action.
Finance and Insurance
To follow up to Mark Zuckerberg’s philanthropic nod, Berkshire Hathaway (NYSE:BRK.A) magnate Warren Buffet has long been widely respected for both his gifts as an investor, but also for his charitable leanings. Berkshire Hathaway has been held as the eighth largest holding in the world, and while finance entities are susceptible to investing in holdings whose operations prove unethical, Warren Buffet has agreed to give 99% of his personal wealth to philanthropic causes.
In addition to his own immense contributions to the Gates Foundation (among other NGOs), Buffet is known for encouraging a culture of giving among the corporate hierarchy, communicating that the market is not the sole place to invest.
In addition to Berkshire Hathaway, Allstate Corporation (NYSE:ALL) has earned recognition for its ethical and environmentally friendly leanings. Allstate has earned a series of awards in the past decade alone lauding the company’s attentiveness to a fair corporate culture and diverse hiring practices. Allstate has gained a reputation for cutting out demographic prejudice in the hiring process, hiring qualified women and people of color in equal measure. In addition, the company has instituted and earnest focus on reducing its carbon footprint and building a culture of environment responsibility. They’ve also put special focus on efficient energy practices, managing to broadly curb the fuel consumption of their facilities.
When looking for the best places to invest, a little research and diligence can go a long way. This research needs not be limited solely to corporate financials, as open source information on a company’s ethics (both disclosed and separately investigated) is widely available for those interested. So take some time to not only consider the diversity of your investments, but also whether or not your potential holdings are global in their respectability.
So, what kinds of companies do you invest in and why?
Guest Post Author Bio: Andy is an avid foodie and writer, eating his way around the Washington DC area. He can be reached at firstname.lastname@example.org or on Twitter at @FreeTheFoodie.
I tend to focus generally on growth stocks, which typically lends itself to tech stocks. I’ve been balancing some of those along with some more solid dividend payers.
Everyone has their own strategy and that is fine. However, if you want to focus on eco conscious companies, these strategies can help.
Thanks so much for your feedback. I tend to feel much the same way. Considering my nest egg has some years to build, I’m focusing more on growth investments right now. Tech stocks tend to be great for this, and many technology holdings are developing business models with greater long-term endurance.
I’m not big into investing yet , but this is definitely something I’ll be concerned about. I’m happy to note that Google has better corporate social responsibility practices than apple, since I’ve forgone the iPhone in favour of an android phone that I’m very happy with. At least it’s a bit of a win.
Good for you. I try to buy products from eco responsible companies too.
Glad I was able to provide some insight. I definitely make sure to examine a company’s record of social responsibility in addition to its earnings reports and financial technicals.
I try to have a nice, balanced portfolio. I don’t think I made a great choice with my current one though – should have paid more attention to all the fees!
Investing is not easy and definitely has a learning curve. You will figure it out. We all go through this phase. I still am.
I have not been into investing in “responsibly” until recently. I think the HP scandals got me really thinking about where I’m putting my money. At the end of the day, companies who practice ethically and even companies who are trying to save our planet through green endeavors will prosper more… at least that’s what I’m betting on. We’ll see how it works out in 5 years from now.
I am betting on the same thing. Let’s hope we are right.
I agree as well. Sustainability is, literally, the future. Companies who forget this may end up going under sooner or later.
I don’t know if “Green”, or “Socially Responsible” is the reason for the uptick in this market. Rather, I see it as their business models, for the most part they incorporate sustainability and run very lean, due to lack of money pouring in. I think that these companies are the most equipped for the future, based on the way they are run
I would agree. The more sustainable and money savvy you can run the more successful you will be in the future. I wish everyone thought like this. Sustainable investing would take off.
There is no doubt that Apple and Google is the best companies in technology category to invest but I am not agree with you regarding Facebook. Raise in Facebook share was just a hipe and nothing. Microsoft is better option than Facebook.