Good deeds, real estate, and you

Those who plan ahead get the greenest buildings at the least expense, Mr. Malin says. Using skylights properly and maximizing windows on walls that run north to south, for instance, can limit dependence on artificial light and create "more pleasant and happier" occupants.

"As long as you start early in the process, and work with designers who know what they're doing, you can do a lot of these things with no increased costs," Malin says. Costs add up, he adds, when owners ask mid-project, "Oh, can we make this a green building?"

Not all real estate investors aspire to be landlords, however. Those with $1,000 or more to invest can receive as much as 3 percent interest from the Capstone Fund offered by Manna Inc., a nonprofit that provides affordable home ownership opportunities in Washington, D.C. The organization has never missed an interest payment, says President George Rothman, and investors know their dollars are helping acquire key properties for rehabilitation and resale.

"For a time, people could get more from us than from their money markets, and feel good about it," Mr. Rothman says. "It's a very secure investment. [Still], this is socially motivated investing, not maximizing your return."

For investors seeking greater returns, REITs may be a better option. Although none come with socially responsible labels, some nevertheless have policies that would please many ethical investors, according to Dr. Pivo.

For instance, seven publicly traded REITs have received recognition for active involvement in the Environmental Protection Agency's Energy Star Program, which promotes energy-efficient buildings. Investors concerned with reducing energy consumption, Pivo says, might consider Arden Realty, Equity Office Properties, Brandywine Realty, Carr America, Glenborough Realty, Parkway Properties, and Prentiss Properties.

What's more, two REITs pass muster with the Domini 400 Social Index. General Growth Properties wins kudos for paying its CEO modestly and for diversity on its board of directors. Maguire Properties gets accolades for aiming to revitalize downtown Los Angeles. Hence, real estate options exist in this realm for ethical investors, but they're not always easy to find.

Investors "are hearing, 'We ought to put some of our money into real estate, but where do we go?' They have no clue where to go," Pivo says. "There's stuff out there, you see, but it's not been systematically represented to the [socially responsible investing] community."

In terms of mutual funds, the Forward Uniplan Real Estate Fund looks for REITs and real estate operating companies that meet certain quality standards, according to portfolio manager Rick Imperiale. Positive indicators include commitments to urban redevelopment, as well as efforts to keep employees and tenants happy.

Even so, Mr. Imperiale's fund doesn't bill itself as socially responsible because the industry is far from clear about what that label means for the real estate sector, he says. Despite the growth of ethical investing in recent years, clarity and unity on what constitutes ethical real estate investments aren't likely to arrive anytime soon.

"It becomes notoriously difficult to define what those [criteria] would be," Imperiale says. "It touches in so many ways on those who would use the real estate. If I own industrial REITs with warehouses used by Philip Morris, would you exclude those [from a socially responsible portfolio]?... I don't think you're going to be able to answer in a hard and fast way what a socially responsible real estate fund would look like."

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