Stocks For The Socially Responsible

Yesterday, I wrote about sin stocks. Today, let’s take a look at a few of the so-called saints!

What does it take to make a socially conscious or socially responsible company?

According to Investopedia, socially responsible investors are mostly concerned with seven areas: corporate governance and ethics, workplace practices, environmental concerns, product safety and impact, human rights, community relations and indigenous peoples’ rights.

Photo by greenbk, courtesy of flickr

It can be difficult to decide which companies are truly do-gooders, but here are five companies that have been labelled as socially responsible:

Herman Miller(Ticker: MLHR) – According to the company’s web site, Herman Miller provides office furniture and services “that create great places to live, learn, work and heal.” I had the pleasure of interning in an office with Herman Miller furniture and it was quite an unusually pleasant environment. The chair was extra-comfortable. Shares of Herman Miller have underperformed the S&P 500 in both 2-year and 5-year holding periods. (View the charts: 2-year, 5-year)

First Solar (Ticker: FSLR) – This solar energy stock has been trading for less than three years and has easily outshined the S&P 500. In fact, the stock has produced a 500 percent return over the period.  (View the charts: 2-year, since inception)

Cisco Systems (Ticker: CSCO) – Cisco’s networking technology was recently highlighted on FOX’s hit series, 24 (Watch a clip).

This IT company’s leadership says corporate social responsibility is “good for business and society.” Cisco has outperformed the S&P 500 in both two and five-year holding periods. (View the charts: 2-year, 5-year)

3M (Ticker: MMM) – 3M brands include Post-it, Scotch and Thinsulate. The corporate web site has a letter from the CEO which highlights their “commitment to legal and ethical business conduct.”

The stock has outperformed the S&P during the 2-year holding period, but underperformed based on 5-year returns. (View charts: 2-year, 5-year).

Vestas Wind Systems (Ticker: VWDRY) – This alternative energy has produced wind turbines since 1979, but the stock began trading just two years ago. It has outperformed the S&P 500, despite a large drop in late 2008.  (View chart)

If you are interested in socially responsible or green investing, there are a variety of mutual funds and ETFs designed to focus on such companies.

To search for companies or funds, visit socialfunds.com and www.domini.com.