Are you a HIP Investor? We’re not talking about being fashion-savvy or having too-cool attitude — in this case HIP stands for Human Impact + Profit. Paul Herman founded HIP Investor in 2004 and since its creation, he has created the HIP 100 Index, consulted with some of the world’s largest companies, wrote "The HIP Investor: Make Bigger Profits by Building a Better World", and much more. Herman helps consumers and businesses understand that you can do good and make money through HIP investments.

I recently had the opportunity to talk with Herman about his appearance at the upcoming Sustainable Brands 2010 conference. He will be on a panel with Dara O’Rourke, CEO/founder of GoodGuide; Cynthia Figge, president of CSRHUB;and Mary Capozzi, senior director of sustainability for Best Buy. The topic of this panel discussion is Today’s Data Explosion and the Drive to Radical Corporate Transparency.

Transparency. That word is coming up more and more frequently in sustainability-related discussions. During our conversation, I asked Herman if he felt that the transparency trend is being fed more by consumer feedback or from internal business decisions. The quick and easy answer is that there is push from both sides to increase transparency, but the most pressure is coming externally, from customers.

At one time everything was considered proprietary information. Businesses were not transparent because they wanted to protect their corporate intelligence. This led to major scandals when some of this internal corporate information was leaked. Think back to the child labor scandals that rocked many international companies in the 1990s. Customers were upset and demanded to know more about the products they were buying. Now, businesses are sharing with one another in the hopes of increasing industry-wide transparency and ultimately boosting sales.

Much of this transparency comes in sustainability and corporate social responsibility arenas. Consumers aren’t the only ones demanding that companies embrace the importance of social responsibility — employees are as well. According to a survey by ConeCause, employees actively seek out companies that “do good”. In the survey, 72 percent of respondents said they wish their employers would do more for social causes.

Another growing trend here in the United States is the inclusion of sustainability goals in company executives’ bonus plans. This trend is already evident in the European Union but now more American companies, such as General Electric, are requiring managers and company executives to meet sustainability goals in addition to the typical financial growth goals. If Mr. Manager meets his financial numbers but doesn’t meet the greenhouse gas emission reduction goal, Mr. Manager won’t get his bonus.

What this all comes down to is that companies can and do make money by doing good.  A business can have a positive human impact by solving human needs and maximize profits at the same time. These two concepts do not have to be mutually exclusive. This is the basis of HIP investing.

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