Welcome to Invest in Society, the blog for people who want to make money by doing good. I know it's hard to find good, free resources for socially responsible investing (SRI) out there, despite the magic of Google, so I will be blogging about investing in publicly-traded companies that don't follow the norm - that take care of their employees, develop technologies to make our world cleaner and friendlier, and abide by common-sense business ethics.
Aside from discussing the business practices, stock movements, and sustainability of a company, I will also give it an SRI rating from 1 to 5.
A company with an SRI rating of 1 would be a company with an inherently unsustainable product, a company that treats employees on all parts of the supply chain poorly, contributes to human rights abuses around the world, and acts with reckless disregard for the welfare of customers and the environment. An example would be Exxon Mobil, a company that produces oil and natural gas. Exxon is a solid investment for institutional shareholders, who don't care about what their money does (other than make more money). The company pays high dividends, has a solid share buyback strategy, and is the largest public company in the history of the world. Exxon is not a socially responsible investment, however, because it is accused of human rights abuses around the world, sells a product that contributes to global warming and is in danger of running out, spent twice as much in 2007 on share repurchases than on exploration and production (thereby contributing to sky-high gas prices), and paid just $5 billion in taxes to the U.S. government in 2007, despite revenues over $400 billion and a gross profit of $86 billion.
A company that would merit a 5, on the other hand, is Nacel Energy Corporation. From the company site:
"Nacel Energy is engaged in the business of generating clean, renewable energy from wind. We offer shareholders the unique opportunity to participate in America’s fastest growing energy business and in the development of utility class wind power generation projects located in Texas, Kansas and soon internationally, in the Caribbean and Latin America. The total planned generating capacity of Nacel Energy’s new wind domestic energy projects is 80 MW – enough energy to power 25,000 American homes.
Nacel Energy is one of the first wind energy companies in America developing COMMUNITY WIND – utility class power generation from wind turbines with a sustainable footprint of 20-30 MW and local investors.
Nacel Energy builds beneficial partnerships with local COMMUNITY WIND developers by offering a unique solution to two of their biggest obstacles – (1) the absence of a tax-efficient structure to utilize Federal and/or State incentives for wind energy development and (2) the scarcity of capital for early-stage projects. The solution is called WINDVEST™ – a proprietary capital structure and process which enables Nacel Energy to successfully joint-venture with local wind energy developers, expedite timelines and improve project economics."
Wind energy is an inherently sustainable technology, and part of Nacel's business is to make it easier for communities to build wind installations. The company's business also involves getting local investors to fund utility-scale wind farms - a green idea in that local energy generators are beholden to local shareholders, who understand local issues best. Plus, the company is committed to paying future dividends to shareholders - always a plus.
So now you know the format.
I'll close with a quote from one of the history's greatest economists: John Maynard Keynes.
"The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future."
The Social Investor