Prague Twin

Tuesday, October 10, 2006

Color me Blue

A growing trend in today's marketplace is socially responsible investing. From fair trade coffee to alternative energy, investors are looking for resposible companies to invest in. Some investors argue that it is more important to feel good about what they invest in than how much profit they make. Sure, everyone can make profit investing in Exxon, but how good does that make you feel? Conversely, one could invest in a company that will compete with Starbucks using only fair trade coffee, but that wouldn't be too smart.

However, today's news proves that social responsibility and profit earning are not mutually exclusive. According to a new report stocks of socially responsible companies that also give more money to the Democrats than the Republicans (so called "blue stocks") have outperfomed stocks of companies that do not meet such criterea and give more to Republicans (so called "red stocks").

Repulicans get about twice as much money from the corporate sector than do the the Democrats. A cynical view is that this money is used in an effort to keep the status quo and to allow businesses to continue to do business as usual. It may be cynical to see it that way, but I don't think it is far from the truth.

But a new age is upon us. As consumers become more conscious of what they buy and the effects of their purchasing power on the environment and on working conditions for employees, socially responsible companies are taking the lead. The Democrats would be smart to ride this wave and continue to work with companies to become more responsible for the good of all: investors, management, consumers, and employees.

From the article....

Companies in the Blue funds will stress five qualities that the research paper attributes to the outperformance of blue companies: innovation, flexibility, concern for employee welfare, cooperation with progressive causes and long-term business perspective.

Indeed, it is not an either/or situation as the old corporate gaurd would have us believe. You don't have to invest in oil companies or weapons manufacturers to cut a profit. In actuality, investing in socially responsible companies will make you feel better about your investment, and it will fatten your wallet at the same time!


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