Doing Good

To Invest Or Not To Invest

No matter how good, every company has some qualities that may be considered socially unredeeming. The question is, When doth the investor protest too much? Standards used for judging companies are as individual as investors themselves; what is considered socially responsible or irresponsible is subject to interpretation.

Some socially conscious investors avoid U.S. government-backed securities because of government involvement in weapons or because of politically conservative or liberal stands on various issues. On the other hand, money raised through the sale of these same debt securities funds AIDS and cancer research, supports the arts, pays for school lunches and backs programs designed to help the poor and seniors. For that matter, those who choose to be socially responsible in a strict sense, avoiding, for example, stocks of tobacco companies, may have to wrestle with the idea of using other products made by the same conglomerate. Many investors are surprised to find that tobacco companies produce widely used products ranging from candies and pickles to cheese and cookies. These same companies may also contribute to society by donating space, time and money to museums, ballet companies, struggling theatre groups or public TV stations.

Some companies that appear on one list of socially responsible businesses don't appear on others. Strict screens eliminate companies that have minor infractions, where others allow more broadbased criteria. In the end, the decision rests with the investor, and more and more investors are considering investments that make them feel good, as well as those that make them money.

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This article was originally published in the October 1996 print edition of Entrepreneur with the headline: Doing Good.

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