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Author: 5000fingers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2247  
Subject: Why SRI? Date: 10/20/2007 3:49 PM
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As a somewhat-left-of-center environmentalist, I'd like to believe in the idea of socially responsible investing. But I just can't get behind the notion that by investing in equities of a socially responsible company (whatever your own definitions or criteria might be), you are in any way "helping" or "supporting" that company. A purchase of stock (whether by an individual or a mutual fund or pension manager) is a transaction limited to the buyer, the seller, and a little off the top to the broker. Not one penny goes to benefit the business itself.

The only way I see to help these companies is by buying their products or services. If I buy $10,000 worth of stock in, say, a company that makes solar photovoltaic systems for homes, I am paying off the previous owner of those shares, and I will hold it until I sell it to the next owner. The only impact to the company is now they have a different address to send the annual report to. On the other hand, if I spend $10,000 to buy a solar system from that company, I am immediately impacting their bottom line and the environment as well. So it seems to me that it through the consumer and business market, rather than the stock market, that holds the only real potential of supporting these companies.

Anyway, I'm not really raring for a debate here. I'd really like to believe in the concept of supporting business with investment decisions. It's just that apart from IPOs (when venture capital really is being raised by the company), I don't see any value in pursuing this concept with stocks. Is it primarily a symbolic gesture, or is there some value that I'm not realizing?
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