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Archive for September 10th, 2010

Did any of you see this “oops” moment in the investment world–how many socially responsible investors and “green” mutual funds were actually invested in disgraced oil giant BP when the Deepwater Horizon exploded? That means if you were an investor trying to plow your money into environmentally sensitive businesses, you might have been unhappy in March to find yourself part-owner of a giant oil company with a bad safety record.

We wrote a couple of articles about it at the magazine I write for, Financial Advisor, where I’m the senior editor. The situation is not as simple as it seems, and if anything, it should remind you that economics make even stranger bed fellows than politics. The reason many socially responsible investors were holding BP was not just so they could boost returns and screw the planet. It is part of a broader engagement to get those companies in the biggest polluting industries to play ball. BP had a stated willingness to lower its greenhouse gas emissions and discuss climate change, unlike some of its brethren in the industry. The bad news is that the company had a crap safety record. This set off warning bells, and many socially responsible funds earlier this year started thinking of dumping the company before something really bad happened.

Before they knew it, something did.

I’m sure The Wall Street Journal article on the story is better than mine, but if you do want to read my story and get more esoteric facts about how socially responsible funds score and rate their holdings, you can see it here.

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