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Ethical investing: The Obama effect

Industry-watchers consider the future of renewables, defense, and other sectors.

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You mentioned that community-based financial institutions had done better than their larger brethren. How much better?

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Wood: They weren’t packaging off their mortgages. They tended to use 30-year fixed rate mortgages instead of adjustable-rate mortgages that would explode on people. They’re notorious for doing due diligence on the people they lend to, and they’ve proven there is a model for lending to low-income people that is sound. That’s the upside. The downside is that the communities they’ve lent to are going to be extremely affected by this downturn.

Are there specific companies that will thrive?

Robinson: In the solar space, the leading company is a company called First Solar. They have the leading technology. They are two years ahead, really, of the typical silicon panels that are being installed.... In the wind space, unfortunately there are no direct plays in the US, because most of the wind technologies are offshore. But I think the leader in that space is a company called Vestas, which does do a lot of turbines here in the US and is building a plant. In the geothermal space, and by geothermal I’m talking about small-scale geothermal, shallow geothermal, which is used for residential and commercial, there is a company in Fort Wayne, Ind., called WaterFurnace. It’s a very small, wonderful little company that continues to grow and pays a dividend and has no debt.... On the efficiency side, there’s a broad range of ways to do that. But I think one of the most interesting ones is in the metering. As you know, you can’t manage what you can’t measure. And so, meters are increasingly important. And the leading company in that space is Itron.

What industries should ethical investors avoid?

Wood: Coal is certainly going to face significant scrutiny going forward.... I think the price on carbon is going to determine a lot of the shakeout and what happens to the markets under the Obama administration.

Robinson: You want to avoid, in my opinion, most fossil fuels because the price is going to continue to go up. Coal is the worst offender. But oil isn’t far behind. And there will be others. I would think that defense companies wouldn’t thrive under the new administration. If we’re going to reduce our presence in the Mideast, or at least try to, that means we’ll reduce some of our spending.... So that would be an area that I’d be very careful not to be involved in.

• Watch the entire conversation at CSMonitor.com/ethicalinvesting.

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