Green investing has become a popular buzzword around the financial community of the last couple of years. Green investing is also known as socially responsible investing or values-based investing. Today it has primarily become known as investing that looks for companies that produce products or services that are friendly to the environment.

The concept of green investing actually is an upshoot out of what was originally called Socially Responsible Investing. Initially, this type of investing was done by those whose religious persuasion led to look for investments that did not involve purchasing stock of companies who were engaged in the businesses of alcohol, tobacco, gambling, etc. But recently this term has transitioned to those who are concerned with the environment and the impact that companies are having on it.

Much of green investing has centered around the topic of energy. Green companies has now come to refer to anything that avoids oil companies or oil service companies. Green investing now refers to wind energy stocks, solar energy stocks, geothermal energy stocks and similar companies.

Now many of the companies in the green investing arena are considered penny stocks since the industries are young and cutting edge. Since these industries are new the companies have to lay out large amounts of capital to get up and running. They operate at a loss for quite a few years. There is also a tremendous amount of competition in the green energy industry. Therefore, many of these companies may not survive. The large capital outlay combined with the high level of competition make it difficult to pick a winner in this arena.

This is one of the reasons that many investors will turn to green investing mutual funds. These mutual funds allow the investor to still participate in the green industry but spread out the risk so that you don't feel the pain quite as much if one of the companies should not survive.

Green investing covers many areas but most associate it with green energy technology. The most familiar area of green energy technology is solar power. Solar power has been around the longest and more people are familiar with it. In its infancy solar energy was quite expensive but there have been great advancements in the technology that have brought the price down. However, it is still quite expensive when compared to electricity. This is one of the reasons that solar power hasn't found larger acceptance.

The other green energy technology that has gained wider use today is wind energy. This is especially true in the area that I live in: the Midwest. There are huge windmills that dot the landscape in the farm country. One of the drawbacks of wind energy is that it is only useful for smaller communities. It requires too many windmills and land to adequately provide energy to largely populated areas.

Other green investing technologies involve trying to power vehicles with something other than gas. This involves biofuels that are derived from corn, soybeans and other plant life. This helps to reduce a dependence on oil but oil is still partly used for the creation of some biofuels like ethanol. It is also more expensive to produce these fuels or they do not provide the same mileage per gallon. On top of this they still lead to pollution that some feel is unacceptable.

Of course there has been a great push to build hybrid vehicles that use battery power in addition to gas. There are also attempts to use lithium powered batteries to serve as the sole source for powering a car. However, this technology is still a number of years in the future before it will gain full acceptance or before it is practical to use.

Green investing involves many different areas. Do you due diligence and research before investing your money.