Other things being equal, we’d all like it if the companies we invested in acted responsibly and progressively — for example, by developing “green” environmental practices and treating employees well. But don’t such policies cost a company money — and therefore make it a weaker investment?
Not necessarily, says Art Tabuenca, who manages so-called “socially responsible” portfolios for institutions and individuals. He notes that several academic studies, including a recent one from Goldman Sachs, suggest that progressive companies can actually do better in the long run than their less-progressive competitors. Examples: Green policies that cut down on pollution might also cut down on waste… companies that try to treat workers especially well also tend to avoid extravagant executive compensation packages, another money saver.
Tabuenca’s picks this week are all from the environmental sector…
Vesta Wind Systems (VWSYF). This Danish company is the world’s largest maker of wind turbines for energy generation. Wind power is growing in popularity as technological advances make it more practical as a replacement for pricey (and finite) fossil fuels. Recent share price: $120.10.
First Solar, Inc. (FSLR). Manufacturing solar power cells is generally labor intensive — and therefore expensive relative to their power-generating ability — but First Solar, based in Tempe, Arizona, has developed a way of producing them more cheaply. Recent share price: $269.97.
PowerShares Water Resources (PHO). This exchange-traded fund (ETF) invests in several dozen water companies, including firms that are involved in water desalinization and purification. With the need for fresh water a growing challenge around the world, many investors consider this sector not only a smart financial pick, but a socially conscious one as well. Recent share price: $22.33.
