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Green Investing

A strategy of green investing means investing in companies that use "environmentally friendly" practices or that are involved in an industry, such as solar power, that aims to reduce humans' impact on the Earth.

Expanded Definition

Green Investing is a subset of socially responsible investing. It makes a company's environmental impact and agenda major criteria when making investing decisions. There are many mutual funds or exchange-traded funds offering investors a one-stop way to invest in a broad range of stocks that meet "green" criteria. This is a more efficient way for individual investors to find green companies than wading through tons of company annual reports and annual 10-K filings to make comparisons.

Obvious choices for green investment would include companies involved in solar power or ethanol, which are working in industries that offer alternatives to oil and coal, which can be considered unfriendly to the environment in terms of how they are gathered and processed and the byproducts of their uses, like carbon dioxide.

Another way to engage in green investing is to consider the overall Earth-friendliness of the companies in which you invest, whether or not they are in a specific industry deemed green. Whole Foods, for instance, focuses on organic food, and GE and Wal-Mart take big steps to reduce their energy consumption.

Publications such as Forbes are likely to contain rankings of "green" companies. Go to the online versions of finance publications and search for "green investing" to get some help finding companies for your green portfolio. Or an organization such as the Social Investment Forum or a service such as stockpickr would have ratings of green companies.

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