Green Investment and Compromises

People become interested in socially responsible investing for different reasons. Many want to save the planet. Others look to alternative energy to end our dependence on imported oil, and by proxy, our motivation to go to war overseas. Others wish to stop exploitation of people in third world countries.

Whatever your motivations are, it’s important to be realistic. For example, you must understand that there is no such thing as a zero-environmental-impact business. Electric cars are charged with power from coal plants, and run on batteries filled with highly toxic substances. Solar panels are made with mined materials. Windmills kill birds and can affect local weather patterns.

Or consider the case of biodiesel. It’s cleaner-burning than petroleum fuels, but not by all that much. It has the potential to move us a long way toward energy independence, but widespread use of it makes food more expensive, which burdens the poor. And we all know that large-scale crop cultivation, even if organic, has a significant environmental impact.

Everything has its price, and at some point a compromise must be made. My point in saying this is not to be cynical, or to suggest you buy into corporate greenwashing. I’m simply suggesting that you don’t get so wrapped up in whatever ideology you’re looking to support with your investment efforts that you ignore great businesses that are genuinely working to make things better, but are not necessarily flawlessly green. No business is (with the arguable exception of the birth control business).

Think it over, and ask yourself this: would you invest in a company that produced oil, but had discovered a way to extract it with less environmental damage than traditional methods, and produced a variety of oil that burned cleaner than any other presently on the market (but still not as clean as natural gas)? What if it tapped into a domestic source that could potentially wean the U.S. off foreign oil completely and permanently?

Your answer to that particular puzzle isn’t all that important. What is important is that you don’t let idealism stymie your ability to support genuine progress. No single technology will solve all of our social and environmental crises. The journey of a thousand miles begins with a single step.