Environmentally responsible investing is one component of a larger phenomenon known as socially responsible investing. The idea is that investors should use their money to support industries whose operations accord with the investors' personal ethics. This concept is not a new one. In the early part of the century, Methodists, Presbyterians, and Baptists shunned companies that promoted sinful activities such as smoking, drinking, and gambling. More recently, many investors chose to protest apartheid by divesting from companies with operations in South Africa. Investors today might arrange their investment portfolios to reflect companies' commitment to affirmative action, human rights, animal rights, the environment, or any other issues the investors believe to be important.

The purpose of environmentally responsible investing is to encourage companies to improve their environmental records. The recent emergence and growth of mutual funds identifying themselves as environmentally oriented funds indicates that environmentally...