Environmentally responsible investments have a greater appeal to women who are more likely to “go green" - and make money in the process.
Environmentally responsible or “go green” investments have a greater appeal among women investors, who are more likely than men to align their financial goals with their personal values, according to the latest research from Millionaire Corner.
Nearly 42 percent of women - compared to less than 27 percent of men - say they are “very likely” or “likely” to make environmentally responsible investments, according to our February survey of 1,150 investors.
What are environmentally responsible investments? The category generally refers to companies that adhere to an environmental code of ethics, and to the mutual funds investing in such companies. An international group called CERES, for the Center for Education and Research in Environmental Strategies, has defined the characteristics of an environmentally sustainable business practices. The list includes reducing waste, safely disposing of waste and recycling. The Ceres Principles also call for the sustainable use of natural resources, energy conservation and environmental restoration.
A growing list of diverse companies have endorsed the principles, including Advanced Micro Devices Inc, which recently designed a new-generation computer processor that has a 40 percent smaller carbon footprint than previous generation models. Another Ceres member company, Anvil Knitwear, Inc. uses eco-friendly fibers, including organic cotton, recycled cotton and polyester recycled from plastic bottles. Vermont ice cream maker Ben & Jerry’s procure milk and cream from family farmers who pledge not to treat their cows with the synthetic hormone rBGH.
Many major U.S. corporations have also pledged to “go green,” including Allstate Corp., Bank of America Corp., Baxter, Bloomberg, Citi, Dell, Ebay Inc., Ford Motor Co., General Mills, Nike, Sprint, Time Warner Inc, Walt Disney Co. and scores of other companies.
Green investments fall under the larger umbrella of socially responsible investments, a category that appeals to a larger share of men than women. Again – more than two-in-five women are likely to make socially responsible investments compared to roughly one-fourth of the men. According to the US SIF – the Forum for Sustainable and Responsible Investing – following your principles can be profitable, as well as rewarding.
Total dollars invested in socially responsible products has grown from $639 billion in 1995 to $3.07 trillion in 2010, said US SIF in a prepared statement: “The bottom line is that more and more investors adopt and use SRI strategies not only because such investments allow a focus beyond the bottom line, but also because returns are comparable to those of more conventional investments.”
Younger investors – those age 40 and under – share the passion for environmental and socially responsible investments. Nearly half of this group, comprised largely of Gen X and Gen Y investors, are “very likely” or “likely” to make socially responsible investments. More than 40 percent share a similar attitude toward environmentally responsible investments and are likely to “go green” with their financial decisions.