Socially responsible investing (SRI) is one way to feel good while doing well, as they say.
Trying to define SRI companies isn’t black and white, however.
For some investors, measures like how “green” the company is matters more than diversity in management. For others, good corporate governance trumps environmental impact.
One way to think about it is to consider how well a company balances the interests of its stakeholders: the community it operates in, its employees, customers, and the shareholders of the business itself.
Three SRI companies that might surprise you:
- Costco might seem at first glance to be the opposite of SRI. But Costco treats its employees exceedingly well, providing them with health insurance (an anomaly in retail) and above-average wages, and it treats its customers as near-family.
- Amazon.com, with its environmentally friendly packaging and paper-free Kindle e-readers, could also be considered SRI.
- Another is Starbucks, which treats both its coffee suppliers and its employees generously and fairly.
Just as important: if you’d owned these three stocks over the last 10 years, you’d have handily beaten the S&P 500.
LouAnn Lofton is the author of "Warren Buffett Invests Like a Girl", and a contributor to the Motley Fool.