Do you walk the talk when it comes to investing? Maybe you’ve been waiting to see which stocks make the most green while promoting green. GreenMoneyJournal.com recently released their Sixth Annual Sustainable Business 20 List to help you in your conscious investing decisions. The list details which stocks perform the best on the social/environmental performance scale and includes large, medium, and small companies representing a variety of sectors. So, which firms deserve our money?
The SB20 list includes:
Best Water Technology (Vienna: BWT.VI) (Austria);
Canon (NYSE: CAJ) (Japan);
Comverge (Nasdaq: COMV) (USA);
Chipotle Mexican Grill (NYSE: CMG) (USA);
First Solar (Nasdaq: FSLR) (USA);
Fuel Tech (Nasdaq: FTEK) (USA);
Green Mountain Coffee Roasters (Nasdaq: GMCR) (USA);
The rest of the list includes:
Groupe Danone (Paris: DN.PA) (France);
Herman Miller (Nasdaq: MLHR) (USA);
Interface (Nasdaq: IFSIA) (USA);
Land Securities (London: Land.L) (UK);
NIKE, Inc. (NYSE: NKE) (USA);
Novozymes (Copenhagen: NZYM.CO) (Denmark);
Ormat Technologies (NYSE: ORA) (USA);
Precious Woods (Geneva: SWX: PRWN) (Switzerland);
Renewable Energy Corp – REC (Oslo: REC.OL) (Norway);
Royal Philips Electronics NV (NYSE: PHG) (Netherlands);
Schmack Biogas AG (Frankfurt: SB1) (Germany);
Vestas (Copenhagen: VWS.CO) (Denmark);
Whole Foods Market (Nasdaq: WFMI) (USA).
How were these companies chosen? Green Money Journal collaborated with KLD Research & Analytics (a “leading authority on social research and indexes for institutional investors”) to narrow down a list of companies that scored highest on the KLD environmental ratings and the Global Climate 100 index. Companies were chosen primarily for their social/environmental performance (vs. financial performance). Those firms that made the list demonstrated that they had moved beyond merely providing a green product/service to incorporate sustainability into the internal operations as well.
After reviewing the methodology and criteria used for inclusion in the SB20, I believe that potential green investors can use this list as a valid guide to profitable returns. I still cringe, however, when I think of Nike as a “sustainable stock.” Although it is true that some large firms have introduced novelty green products, such as Nike’s “Considered” line and the latest “Air Jordan XX3,” the vast majority of products sold by major manufacturers are not currently made according to sustainability standards.
Nonetheless, the inclusion of “mainstream” companies on a SB20 list demonstrates further the extent to which green concepts are starting to gain hold in the conventional business environment. As one SB20 judge stated, “It may be more indicative of the increasing leverage that shareholder activism and pervasive media exposure can have on companies. First and foremost these companies (particularly those in consumer products) value their corporate reputation.”