It was inevitable that as green businesses (or businesses going green) started cropping up, so would the potential for green investing. It's an ideal scenario after all: you can possibly make money while helping the environment all in good conscience. However the question still remains as to the best approach to hopefully increase the chance of making a profit.

"Can you make money? Yes. Some of them have made money. You have to apply the same sort of due diligence as you would with any investment," said Adrian Mastracci, portfolio manager at KCM Wealth Management Inc. in Vancouver. "If someone wants to go totally green, I think you could probably do it, but you might have to pick individual securities to do it," he said, adding the smaller firms can also have more risk.

"The only problem is that a lot of the green companies are up and coming... not a lot of them are tried and true."

To that end, Mastracci believes the safest options are investing in large companies that already have a well-established reputation for green practices or investing in the obvious green choices such as wind or solar farms.

Environmental and social policies are becoming more common and one expert believes that due to the green push in recent years, most companies are starting to think along the lines of environmental responsibility.

Michael Jantzi, of independent investment research firm Jantzi Research, said while investors will almost always focus on the bottom line the benefit for them and the environment is that most companies can no longer afford to ignore green initiatives.

In fact, large investors such as pension funds are required to seek out environmental risk in the companies they own.

"If companies aren't paying attention, and don't have systems in place to manage that side of things, the environment can come back in a very ugly way," Jantzi said, adding companies who ignore the environment do so "at their peril."

Other experts say the progress of green companies has been positive and believe that investing in strong companies with a firm commitment to environmental practices can lead to a healthy return, so long as it doesn't lead to a "false sense of security."

"It's very hard to truly invest green," said Laura Wallace, managing director Coleford Investment Management, adding that people have their own environmental issues that concern them.

She recommends investors seek out companies with the best green record that suit their investment style.

"Companies are sensitive that the environment is an important issue so they are making sure they are putting a good spin on what they do," Wallace said.

» Canoe Money