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  are mutual funds that invest in socially-responsible
companies that do not take part in immoral or unethical activities.

As a rule of thumb, this typically excludes tobacco and gaming

companies, as well as those with questionable labor practices or
environmental policies. Eco-minded individuals are putting their
money where their conscience is -- into "green" investments that
support the environment. This can include efforts to reverse global
warming, clean the earth's oceans, develop alternative energy, and
generally speed our progress toward sustainability. As a result, there
are now hundreds of public companies that tout their greenness,
dozens of green mutual funds, and even a handful of green stock
market indexes.

Thus green fund will only invest in companies that are deemed
socially conscious in their business dealings or directly promote
environmental responsibility.

A green fund can come in the form of a focused investment vehicle

for companies engaged in environmentally supportive businesses,
such as alternative energy, green transport, water and waste
management, and sustainable living.

One of the first mutual funds to incorporate socially responsible

screening was the Pioneer Fund (PIODX), which has avoided the
stocks of companies whose primary business is alcohol or tobacco
since 1950.

The market has expanded since then so that there are more than 200
mutual funds and roughly a half-dozen exchange-traded funds that
invest using one or more social or environmental criteria. There are
now SRI funds that are balanced, focus on equities, seek international
securities, invest in bonds, track indexes and invest in money market
instruments.




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creen¶ investments are no longer just a luxury, but are now a legal
responsibility, according to a new report by the United Nations
Environment Programme (UNEP) and a powerful group of asset
managers controlling some $2 trillion in assets. The 120-page
publication released today argues that if investment consultants and
others do not incorporate environmental, social and governance
(ESc) considerations into their services, they face ³a very real risk
that they will be sued for negligence.´

It also stressed the central role that the world¶s largest institutional
investors ± including pensions funds, insurance companies, sovereign
wealth funds and mutual funds ± have in easing the transition to a
low-carbon and resource-efficient green economy. ³ESc issues are
not peripheral but should be part of mainstream investment decisions-
making processes across the industry,´ said UNEP Executive Director
Achim Steiner.

Further, he noted that creative market mechanisms and other

incentives can help to ensure that as investors return to markets after
the current financial turmoil ends, they will put their funds into a
greener economy and not the ³brown economy of yesterday.´

The new report, entitled ³Fiduciary Responsibility: Legal and

Practical Aspects of Integrating Environmental, Social and
covernance Issues into Institutional Investment,´ was produced by
Asset Management Working croup of the UNEP Finance Initiative
(UNEP FI), a partnership between the agency and more nearly 200
financial institutions around the world.

It was launched on the eve of the annual Principles for Responsible

Investment (PRI) event in Sydney, Australia, which will draw many
of the largest institutional investors. Almost 600 institutions,
representing over $18 trillion in assets, have signed up to the PRI, a
joint effort between the UNEP FI and the UN clobal Compact, a
voluntary initiative to promote corporate citizenship which currently
involves over 5,000 companies across 130 countries.

 


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