Q&A: 'Green' investing

October 3, 2008

How can I invest in a more environmentally friendly manner?

Q: I sometimes worry that I'm indirectly contributing to global warming by investing in stocks from companies that harm the environment. How can I invest in a more environmentally friendly manner?

A: "Green" investing is an area that is certainly growing in interest, with some investors looking to put their money into companies that are doing their best to minimize harm to the planet, while others are simply looking to get behind what could be the next big growth industry. In either case, many investors would rather not deal with the worry of picking individual stocks. For such investors, exchange-traded funds (ETFs)-baskets of stocks that follow a particular index and are bought and sold like conventional stocks-could be the answer. A number of ETFs hold stocks of companies dedicated to alternative energy or clean technology.