Investing can be empowering -- and not just because profits can free you from financial worry. Just a few decades ago, an investment strategy was key in the demise of one country's segregationist political policies.

Over time, this strategy brought forth a $3.07 trillion industry.

And it evolved from an 18th-century religious leader's philosophy.

We're talking about socially responsible investing -- known as SRI.

In the mid-1700s, Methodism founder John Wesley told his followers to conduct their business in the most ethical fashion possible, shunning any activities or financial transactions that might harm others. His tenets, presented in a famous speech called 'The Use Of Money,' would lay the groundwork for an investment category that took root nearly three centuries later.

These days, we have many options to steer our dollars toward socially responsible investing. Though Wesley focused on religious reasons to act nobly, today's SRI activities focus more squarely on environmental, health and even political concerns. For example, in the 1980s, many U.S. investors dropped their holdings in South Africa in protest of apartheid, putting pressure on the country's business community to call for an end to government-sponsored racial segregation.

Around that time, the United States' first financial firm dedicated to SRI was launched. Trillium Asset Management provides investment advisory services to clients who want to own a basket of stocks and funds that emphasize virtue over vice.

Roughly three decades later, SRI has evolved into a $3 trillion industry (though the mutual funds and exchange-traded funds that focus on SRI manage roughly $100 billion in assets). If you want to stay abreast of the key trends impacting SRI, check out socialfunds.com.

SRI doesn't necessarily focus on companies involved in clean energy, health/wellness or other seemingly virtuous industries. One approach to the SRI category is to avoid companies that are known as 'sin stocks,' such as Big Tobacco and gun makers.

Many Ways To Play

These days, there are more than 100 mutual funds that capitalize on the SRI theme. Popular choices include:

  • The Pax World Balanced Fund (Nasdaq: PAXWX) invests in companies 'that provide goods and services, such as health care, technology, pollution control, housing, utilities, and education, that improve the quality of life.'
  • The Ariel Appreciation Investor (Nasdaq: CAAPX) focuses on mid-cap stocks, eschewing any companies that have a poor environmental record or sell products regulated by the Bureau of Alcohol, Tobacco and Firearms (ATF).
  • Parnassus Equity Income's (Nasdaq: PRBLX) twist is that it may invest up to 10% of its assets in community development loan funds.

Most of these SRI mutual funds have developed long and successful track records. More recently, in keeping with steady development of ETFs, several passively managed SRI funds have been launched in the past few years. Here's a quick profile of four of them.

1. iShares MSCI USA ESG Select Index ETF (NYSE: KLD)

This ETF, which carries a 0.50% annual expense ratio, tracks an index created by investment firm MSCI that scores companies in terms of environmental stewardship, community and society, employee and supply chain relations, customers and governance and ethics. With more than $200 million in assets under management, it's the largest SRI ETF available.

2. Pax MSCI EAFE ESG Index ETF (Nasdaq: EAPS)

This fund has the same focus as the one above, except that it invests in companies outside of the United States. With more than 60% of its assets in Europe, the fund generated a solid 20% return in 2012 as stocks in that region have begun to rebound after the precipitous slump in 2008 and 2009.

3. Vanguard FTSE Social Index Investing ETF (Nasdaq: VFTSX)

This fund focuses on large-cap stocks such as Google (Nasdaq: GOOG), Johnson & Johnson (NYSE: JNJ) and a number of large banking stocks, though it's the quite low 0.29% expense ratio that should get your attention. This ETF has slightly outperformed the S&P 500 over the past five years, generating roughly 6% annualized returns.

4. iShares KLD 400 Social Index (NYSE: DSI)

This is also an index-based ETF that screens for companies that rank high on the MSCI criteria noted above while avoiding companies involved in alcohol, tobacco, firearms, nuclear power, military weapons and gambling.

The Investing Answer: It's clear that this investment category is here to stay, with an ever-expanding array of choices for investors. In effect, it's never been easier to 'do good while doing well.'