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Investing in Socially Responsible Mutual Funds
By Debora and Reathel Geary
Think of it this way: As a parent, you don't have a lot of choice about needing to build up some savings. Kids are expensive! If you invest in socially responsible mutual funds, your money is doing double duty. While waiting for your son or daughter to enter college, your child's education fund can help encourage a company to start recycling, hire more women or donate to community causes.
Janine Reid, mom of three, believes that investing is just a natural extension of her parenting. "We teach our children to recycle," she says. "We buy organic food. We should also ask ourselves what legacy we are leaving our children and grandchildren."
Reid's parenting values are obviously strongly pro-environment, and she believes this translates very well into investing decisions. What is the investment equivalent of buying organic or recycling? "Are we supporting the production of toxic waste, global warming and over-consumption of fossil fuels?" Reid says. "Or are we investing in companies that are making a difference and setting positive standards?"
Reid has inside knowledge on how well this can work – her husband, Alan, is the president of Sierra Club Funds. "Parents should find the Sierra Club Funds appealing because they can use their investments to help ensure that their children and future generations have clean water, clean air and a greener planet," says Alan Reid.
The Sierra Club Funds are a good example of what parents can expect from a quality SRI fund. A good fund will have a clear definition of how it screens for companies to include in their portfolio. "Each company in the Sierra Club Funds investment portfolio must pass more than 20 environmental and social guidelines," Alan Reid says.
As you might expect from the mutual funds of an environmental organization, many of the screens look for key environmental issues, excluding companies that contribute to global warming, land, air and water pollution. However, Sierra Club Funds also screen out companies that make guns, produce genetically modified foods or test products on animals.
