They don't produce much in the way of greenhouse gases themselves, but mutual funds and exchange traded funds can leave an indirect carbon footprint.
Trucost PLC, a London-based environmental-research organization, recently calculated that the companies held by 91 surveyed funds are associated with producing more than 615 million metric tons of carbon dioxide globally, according to a report released last week,
That total is the equivalent of 8.6% of U.S. greenhouse gas emissions of almost 7.13 billion metric tons in 2007.
So which funds were the carbon winners and losers?
The Financial Select Sector SPDR ETF (XLF) had the smallest footprint, followed by the Vanguard Health Care Fund (VGHCX), PowerShares QQQ Trust (QQQQ), Ariel Appreciation Fund (CAAPX) and Oppenheimer Global Fund (OPPAX).
The iShares FTSE/Xinhua China 25 Index ETF (FXI), had the largest footprint, followed by the Fidelity Capital Appreciation Fund (FDCAX), Janus Fund (JANSX), Sentinel Sustainable Core Opportunities Fund (MYPVX) and Energy Select Sector SPDR ETF (XLE).
By identifying funds' carbon footprints, Trucost hopes that investors will see the environmental cost of their decisions and take action, making socially conscious investing mainstream, said Simon Thomas, the group's chief executive.
"Funds need to be moving capital away from carbon-inefficient companies," he said.
Apart from their environmental impact, carbon-inefficient companies are likely to have poor relative performance as governments move to reduce carbon output, he said.