Is green investing a subset of socially responsible investing, or is it something different? Is green investing exclusively focused on energy and environmental issues, or can it include people too? Is green a fixed color-or are there different shades of green?

The definitive answer to all of these questions is "Yes!"

For the past several weeks, there has been a lively discussion about these and other related questions among financial advisors affiliated with First Affirmative Financial Network. This dynamic conversation has been confined to a Web 2.0 community site designed to allow licensed investment professionals to speak freely among peers. The group has explored the various notions of "green" versus "sustainable" versus "socially responsible" versus "transformative" investing. While it is a closed site, we can still take a peek inside to see what all the talk is about.

First, it's obvious that a new market for all things "green" is evolving. The process started long before President Barack Obama incorporated green tech and green jobs into his plans for revitalizing the U.S. economy. Now that money is flowing to the emerging green sector, the "Train to Greenville" is quickly picking up speed. Fortunately, there's room for most everyone to climb aboard.

Indeed, it's not uncommon to hear that "green is the new black." New York Times columnist and author Thomas Friedman calls it "the new red, white, and blue." Meanwhile, Adam Werbach, the global CEO of Saatchi & Saatchi S, has said that "history and the public are fatigued by 'green,'" which he says to many people means choosing to protect the environment, nature and the atmosphere over all other things. Instead, he advocates refocusing on "blue," which he says embraces social, cultural, economic and environmental issues. So many colors have now become zeitgeist buzz words that it's all getting to be a bit confusing.

As a financial advisor, you might have your own feelings about these topics and how important they are. But what's really important is what your clients think about green investing. Sure, some may simply want to profit from the sector because it's hot. But others want to make money and make a difference, and it's with these people that the idea of "green" really resonates. Part of their motivation as investors is to help change the world for the better.

Unlike mutual funds, which cannot treat one shareholder differently from another, financial advisors can meet each client where they are, so to speak. Good advisors can gain an understanding of not only financial goals but the values a client may want reflected in an investment strategy. They can then craft a portfolio specifically designed to meet each client's unique needs. But, make no mistake, when it comes to those investors for whom economic value and social value are not mutually exclusive, one size does not fit all things green.

A Green Investing Continuum
There really are various shades of green. At one end of the spectrum-let's call it the light green end-are those investors who are predominately interested in companies that promote things like clean energy and clean water, and companies that seek to mitigate climate change.

On the darker end of the green spectrum are those investors who need to know the story behind the story before taking action. For example, what if that profitable, growing company that builds solar panels also mistreats its employees? These investors would not be willing to invest in a company that expresses great concern about the environment but does not apply the same concern and respect to its other constituents.

It could be said that these investors represent the more responsible, deeper greens. In addition to energy and environment, they value a kind of good corporate governance that looks after shareholders and employees. They want their money helping to change the world for the better in a large way. They reject investments not only in pollution, but also in human rights abuses and other harmful products and behaviors.

Deeper green investors know that we are all in this together. They intuitively understand that the Earth is the most sophisticated solar-powered recycling system ever created. They think investors must take responsibility for the impact money has on the world. They know that investment returns over the long term depend on the performance of innovative, well-managed corporations. And that these companies themselves depend on the health of human societies and ecological systems.

Those investors of the dark green shade adhere to the definition of socially responsible investing offered by the Social Investment Forum on its Web site: "a process that considers the social and environmental consequences of investments, both positive and negative, within the context of rigorous financial analysis."

Evolution Toward Sustainability
Light green investors may come to these deeper understandings as they continue their journey, but dark green investors are already seeing that the endgame is sustainability-a planetary ecology and a global society that can sustain vibrant life in the pursuit of happiness, health and personal fulfillment for generations to come.

But it's a long way from here to true sustainability, and that's why we have begun to think about the concept of "transformative investing." We think this terminology describes what we and our clients want money to do-catalyze a shift in culture and behavior that may one day create a truly sustainable world. We think that when the greens and blues fade after multiple washings, "transformative" will still describe how our clients want their money working in the world.

Once upon a time, natural and organic food was only desirable to the crunchy granola crowd. Eventually, it became cool to be "natural" and even some highly processed junk foods were proclaimed to be natural. But people who wanted to eat better soon realized that there are important differences between some company's arbitrary definition of "natural" and their own desires for "healthy." They learned to read the fine print and they learned to seek out those who they could trust. The same thing will happen with green investing.

We may be at a stage where who we are and what we deliver is more important than what we call ourselves. And who we are is much more complex than any one word. Any advisor whose clients want to really pursue a "green" investing strategy should use whatever terminology works best. Investors know what the color of green looks like. The shade varies from person to person, so meet them where they are. There are many entry points into the green continuum.

Because a socially conscious strategy depends on the needs of each individual, a financial advisor should focus on each client and match him or her up with the investment strategies that best fit. One at a time, those relationships will intensify, the color will deepen, and the word will spread. And, in the end, it really will matter.

Very special thanks to the following First Affirmative Financial Network advisors who contributed indirectly to this article: Jackie Cabe, Georgette Frazer, Jim Frazin, Greg Garvan, George Gay, Patricia Hathaway, Ken Jacobs, Michael Kramer, Justin Martello, Gary Matthews, Laurie McClain, Tom Moser, Kevin O'Keefe, Lincoln Pain, Ben Roberts, Jan Schalkwijk, Eric Smith, Steve Smith, Susan Taylor and Robby Waldeck.

Steven J. Schueth is the president of First Affirmative Financial Network, an independent registered investment advisor. The firm provides asset management services and supports a nationwide network of investment professionals who work with socially conscious investors. First Affirmative also produces the annual SRI in the Rockies Conference for the sustainable and responsible investment industry. The 20th annual SRI in the Rockies conference will be October 25-28, 2009. Schueth is a former director and spokesperson for the nonprofit Social Investment Forum. He can be reached at [email protected].