Funds Do Care About a Company’s Ethics

The article, “Greenpeace Assails Record of Waste Management Inc.” (May 10), inaccurately implies that few environmentally oriented investment professionals are concerned about the company’s ethics.

As of Dec. 31, none of the 11 socially screened mutual funds (funds invested according to both social and financial criteria) held Waste Management shares. The reason? The company’s spotty ethics and environmental record.

“Environmental” funds are not run by, or for, environmentalists. Those funds invest in the environmental sector because environmental cleanup and regulatory compliance is a growth industry. Such funds market themselves as “environmentally correct” for obvious reasons. In fact, most so-called environmental funds consider only the bottom line in selecting their stocks. On that score, Waste Management has done quite nicely, which is why so many of these sector funds hold its shares.

The socially responsible investment (SRI) industry recognizes only two environmental sector funds as truly environmentally responsible: New Alternatives and Schield Progressive Environmental, although some environmentalists would quibble with portions of their strategies as well. Neither holds Waste Management.

The cream of the socially responsible funds manage to perform at or above market levels without investing in socially destructive firms such as polluters, tobacco companies and firms operating in South Africa.

The Pax World Fund, for example, was the top-performing balanced fund in the country last year. Your socially concerned readers should look to SRI first for investments that will both give them market-level returns and enable them to sleep at night.

ALAN REDER, Olivenhain, Calif.