Whose Responsibility are Green Investments?

At last: EPA announces danger to human life

The Environmental Protection Agency (EPA) has now confirmed that scientific evidence clearly shows that greenhouse gases “threaten the public health and welfare of the American people”.  The EPA has identified the main pollutant as “carbon dioxide from burning fossil fuels” and called for a reduction in these emissions to be enacted by Congress or the White House.

Many call the timing of this announcement political due to the upcoming international conference on climate change. Environmentalists, however, seem thrilled with the timing because it shows a commitment on the part of the U.S. to step-up pollution control efforts either with or without the help of Congress.

A history of token responses

The United States has long been criticized by the rest of the world for putting its economy ahead of environmental responsibility. Many nations have condemned U.S. environmental legislation as being far too little and far too slow to make any real impact. Big business lobbies, especially the oil industry, have argued that too strong an environmental agenda would cripple many businesses. Given the latest health findings, however, and given that the auto industry already lies crippled, this argument seems to have lost some of its sway.

The connection between a green environment and the green in our wallets

Actually, the connection between money and values has been around for a long time. According to Investopedia, ancient cultures including the Jewish culture, have long promoted investing in companies that promote values that match their religious beliefs and avoiding businesses with that promote values counter to their religious teachings.

Here in the United States, the Quakers have long promoted a sense of moral stewardship by asking believers to patronize companies aligned with their beliefs. According to the Institute of Socially Responsible Investing (SRI), beginning in the 1970s, this value-based investment style has come to characterize the “buy green” movement in the U.S.

What’s in it for us?

What’s in it for us may very well be our continued existence. The concept of “green” business has moved from the fringe to center stage, and the green advertisements of major companies demonstrate a growing belief that economic health, human health, and environmental responsibility are all intertwined.  Johnson and Johnson brags in a recent commercial that one of their power plants is powered by emissions from a garbage dump. IBM boasts of its cooler and more environmentally friendly servers. The list of green-conscious companies is growing by the day.

What is in it for you?

As an individual investor, a new layer of research must be added to our usual investment criteria. In addition to all the balance sheet issues, investors need to also analyze how the companies they’re considering buying into are positioned with regard to environmental issues. Will these companies hold up well to public scrutiny? Will they do well with existing and proposed environmental legislation? By investing in companies with environmentally sound practices, you will be investing in a healthier and cleaner future as well as greater financial returns.

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(Photo from markhillary, Flickr.com)

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