Taking Stock of Rio : Stockbrokers help to screen investments giving priority to the environment. Several mutual funds gain special attention.

A new relationship between business and the environment seems to have emerged at the Earth Summit in Rio de Janeiro, and several Ventura County stockbrokers are in a position to field questions about it.

What’s that, you say? Stockbrokers with views on the environment? Maybe they’ll try to sell me stock in the company that trained those Alaskan seals to applaud when an oil tanker passes by. Or a company that’s decided to label its ground-to-air missiles as biodegradable.

Not this time. If you ask some questions about which stocks are “screened” for their environmental correctness, you might learn something and maybe even make some money. “A lot of people are not even aware that you can make money that way,” said Larry Perman, a broker with the Thousand Oaks office of Shearson Lehman (owned by American Express).

Today, a dozen mutual funds available through most major brokerage offices in Ventura County hew to a standard of environmental friendliness that readers of this column might find acceptable. And, according to Ron Goldman of Prudential Bache’s Thousand Oaks office, “There will be nine or 10 more created this year.”

Why? Because clients like you and me are asking a lot of new questions these days. And after the Rio summit it’s clear that the big economic powers such as Germany and Japan are switching to eco-technology. Merrill Lynch, assessing the “investment climate” in an internal memo last week said, “It is business that will have to deliver the products to counter the threats to the environment.”

Recent headlines about missile and defense cuts, space and nuclear spending cuts and even an end to dam building indicate certain old kinds of projects are history. On the other hand, Merrill Lynch foresees a tripling of eco-technical spending in five to six years. And we’re not talking about painting some stealth bomber green. Here are the stipulations one stock fund--Calvert Social Investment Fund--imposes. Maybe they describe the product line and management practices of the kind of company that will make it through the uncertain times ahead. Their recommended companies have:

* Developed new products or processes that will help sustain or enhance the environment;

* Initiated innovative pollution control programs;

* Made progress in reducing waste at the source or recycling waste where possible;

* Adopted technologies to conserve energy;

* Taken responsibility for monitoring third-party waste haulers;

* Implemented emergency response systems for potential accidents resulting from operations; and

* Conducted audits of their own environmental performance.

Come on, you say. Nobody can do that kind of stuff and stay in business. I had to face that question myself before writing this column.

These eco-stocks are volatile. Last year a lot of them were 20% more valuable than they had been the previous year. And this year most are back to single-digit profitability or even worse. All stocks on the famous Dow Jones Average are going like a yo-yo.

On a whim, I asked one mutual fund professional to select 30 stocks from an environmental standpoint--new stocks to watch instead of the ones we worry about each night on the TV news.

Sophia Collier, treasurer of Working Assets Common Holdings, substituted a company called Baldor Electric for General Electric because the motors made by Baldor use less electricity. Dayton Hudson Stores replaced Sears Roebuck. Apple replaced IBM. Get the picture? The day after she compiled this “Green Dow” I checked to see if it would perform better than the non-green group of companies. It was the same. This is not a scientific test, you realize, only an indication that it might not be an absolute disaster to buy stocks chosen by your environmental conscience.

Any mutual fund is required to tell you what stocks it holds and what the companies involved are doing. Rubbermaid will pop up on some of these lists because they make things from recycled products. Waste Management Inc. will appear in some because they collect and market recyclables.

On other lists Rubbermaid will not appear because it doesn’t make everything from items rescued from the landfill. And Waste Management, a huge operation in 20 countries worldwide, is in legal hair-pulling matches here and there--arguments with EPA about business practices and with homeowners about landfill siting.

My own screening approach to these stocks is this: No armaments, no tobacco, no discriminatory hiring practices and a documentable slant toward environmentalism. When you call a broker you can specify your own screen.

Mutual funds sort of stick you with a screen somebody else thought up. But you can speak to professionals at brokerage houses who will follow exactly the “green” instructions you give them. Be persnickety. There are many stocks that will survive the most orthodox eco-examination.

* FYI

Some Ventura County stock brokerages who handle “socially responsible” mutual funds of a pro-environmental character are: Prudential-Bache, 495-2525; Merrill Lynch, 497-0390; Smith Barney, 497-0881, and Shearson Lehman Advisors, 656-3171. Some of the “environmental” funds to inquire about are Kemper, Oppenheimer, Working Assets, Calvert, New Alternative, Covenant, Domini and Parnassus. When you call, make a special effort to connect with a broker familiar with this kind of specialized investing. Recommended reading: “Economics As If the Earth Really Mattered,” by Susan Meeker-Lowry. Available at the Ventura Bookstore on Main Street in Ventura.