More and more investors are doing so, largely because of the growing antagonism toward tobacco companies. The number of funds that screen investments according to social criteria jumped from 55 in 1995 to 144 today, according to the Social Investment Forum, an advocacy group for socially conscious investing. These mutual funds are part of a broader universe that includes pension funds and other investment portfolios held by local and state governments, nonprofit groups and religious and educational institutions. Some use screening to avoid investment in certain stocks, while others use the voting power they get from stock ownership to pressure companies to change.
Tobacco companies are the most widely banned stocks in socially screened portfolios.
They are prohibited in 84 percent of those portfolios. About 90 percent of the social portfolios screen out three or more types of stocks, the forum says. Mutual fund investors need not give up a lot of return to follow their principles. The Domini index excludes companies involved in tobacco, alcohol, gambling, weapons-making and nuclear power. It includes companies judged to have good records on workplace diversity, employee relations and environmental issues.