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March 05, 2001
Green Investment Advisor Likes All Industries
Light Green Advisors takes unconventional approach to selecting top environmental performers.
SocialFunds.com --
Many socially responsible mutual funds avoid investing in oil and other resource extracting
companies, as well as manufacturers that have had trouble in the past with polluting. Light Green
Advisors (LGA) embraces a "best of class" approach for all industries, including extractive and
heavy industries. The only industry explicitly excluded by LGA is the tobacco industry.
 "Why shouldn't socially and
environmentally responsible investors support companies that are doing the right thing?" asks LGA
co-founder and president Jon Naimon. "These programs are progressively reducing society's
environmental burden and contributing to the corporate bottom line at the same time."
Seattle-based LGA takes a relatively unique approach to defining how a company is
environmentally responsible. It advocates a U.S. Environmental Protection Agency (EPA) strategy of
encouraging companies to adopt effective pollution prevention measures.
LGA products that
incorporate this approach include the Eco*Index and the Environmental Leadership Trust. The
Eco*Index is a broadly diversified, passively managed index based on the Standard & Poor's (S&P)
500. It comprises 320 companies with average or above-average environmental performance from all
industry groups except tobacco.
The Environmental Leadership Trust is a diversified unit
trust consisting of 30 S&P 500 stocks in most major Standard & Poor industry groups. It includes
firms that face environmental challenges but are taking the necessary steps manage their risk.
While last year was not kind to many socially responsible mutual funds, the Environmental
Leadership Trust performed above average. From its launch in late October 1999 through the end of
2000, the Trust yielded a 10.92 percent return, 7.42 percent greater than the S&P 500 for the same
period.
LGA believes companies that do a superior job of reducing their environmental
risks have a clear advantage over their competitors. To be included in the Eco*Index or the
Environmental Leadership Trust, firms must first be evaluated for certain environmental performance
criteria. These criteria consider industry trends in environmental emissions of toxic material,
waste generation, spillage frequency of hazardous materials and environmental regulatory penalties.
LGA then uses a proprietary scoring model to integrate this environmental performance
information with financial data. The results dictate LGA's stock selection.
LGA's
Environmental Leadership Trust includes some companies not to be found in many other socially
responsible indices and mutual funds. One example is Anheuser-Busch (ticker: BUD).
LGA's
analysis of Anheuser-Busch (ticker: BUD) found that historically the company has been an industry
leader in preventing spills, minimizing waste, and meeting environmental compliance requirements.
According to LGA, Anheuser also operates one of the U.S.'s largest container recycling programs.
The Trust also includes Halliburton (HAL), a company that gained media attention during
last year's presidential campaign. Vice President Dick Cheney formerly was Halliburton's chairman.
LGA chose Halliburton based on its performance in spill prevention, management of
remediation requirements, and success in meeting environmental compliance requirements, relative to
its industry peers. LGA notes that it does not agree with Halliburton's views on climate change
and drilling in the Arctic National Wildlife Refuge.
LGA's Eco*Index and Environmental
Leadership Trust offer a more even weighting between growth and value than many other green
investment opportunities. But social investors will have to decide for themselves whether the
inclusion of extractive industries and large manufacturers aligns with their environmental views.
http://www.lightgreen.com
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SRI World Group, Inc. All Rights Reserved.
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