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].