Lady Dividend’s Green Investments

Young people today are wary of stocks and I think I know why. My recent review of my portfolio shocked me. I found that even so-called Socially Responsible Funds (SRIs) were invested in what I call “notoriously foul companies”, when you dig deeper. Here I am, living a green lifestyle, whereas my money was invested in companies I wouldn’t even shop in, or was actively AGAINST (ie pipelines).

Are there investments which are gentle to the environment? I recently purchased Solar Bonds, which pay 5% interest for 5 year bonds, and 6% for 15 years. The projects are related to government initiatives so the demand is there. However, what about stocks? And what about diversification? Recently I read Invest Like you Give a Damn, which encouraged me to research into stock market investments which could both make me money and align with my personal values.

As a fellow Bogglehead, you may know that investing in index funds provides adequate market diversification while keeping fees down. Those fees are a killer. Index funds can range from .25%- .5%, and mutual fund fees are anywhere from 1.5% to 2.5%. Could I find ultra-green index funds? My rules for selection were as follows:

  1. Management Expense Ratio under 1%. That means more of the gains are staying in my pocket, rather than going to a fund manager.
  2. No evil companies! Now let’s quantify what that means:
    1. No weapons, mining, or oil extraction.
    2. No companies involved in extreme waste or pollution (plastic bottles industries and other wasteful industries).
    3. The companies involved should demonstrate socially responsible commitments.
  3. The fund needs to be tax optimized if possible.

Innergex Renewable Energy Inc. (INE)

Innergex is a Canadian company involved in renewable energy fund investing in hydroelectric, wind power sectors and solar photovoltaic sectors.

Desjardins SocieTerra Environment Fund A (DES108)

This Canadian fund purchases the shares of worldwide corporations that take a responsible approach towards the environment. The MER is higher than our target, 2.34, however I could not find any other fund which suited my standards for Canadian Equities.

Social Housing Canadian Bond Fund A (PHN703)

This is a Canadian fund which invests in bonds of Canadian governments, and companies or securities of companies that conduct themselves in a socially responsible manner. The MER is .91.

Global X Conscious Companies ETF (KRMA)

For my readers in the United States, this US- based ETF holds well-managed companies that achieve financial performance in a sustainable and responsible manner. It has a .86 MER, which is below our 1% limit for expenses.

To be honest, as someone who aims for zero-waste, minimal packaging, and avoiding animal products, the green selection in the stock market just isn’t there. It seems to be a case where certain companies are the lesser of two evils, not necessarily good. I will likely be slowing down with stock investments and focusing more heavily on other asset classes of bonds and real estate. When you compare buying a company like Amazon (part of KRMA), which creates waste in shipping materials and transport, to buying an investment condo, which does create heating, cooling, and water waste, it’s hard to argue that Amazon is the better buy.

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Readers, do you have any funds I should be looking at? How do you make your portfolio more palatable?