“Greed, for lack of a better word, is good,” the mythic Gordon Gekko pronounced in the 1987 hit Wall Street. Michael Douglas seared those words into our collective conscious for more than two decades – yet today many forward-thinking investors and leading executives are questioning the dark consequences of that theme, given the 2008 meltdown and subsequent Great Recession.

A new crop of business strategies, product innovations and investment approaches are emerging to show that firms can be more profitable and deliver for shareholders when they balance unbridled short-term greed with the opportunity to do more good for all of society. By solving seemingly intractable long-term societal needs with today’s powerful levers of business and investing, these leaders are paving the way to a better world and potentially bigger profits.

In 2010, the Wall Street: Money Never Sleeps sequel’s open-eyed trader Shia LeBeouf offers “it’s about doing the ‘right thing’ ”; Gordon Gekko counters “it’s about the game.” But, investing and leading can be about both the “right thing” and the “game” – it’s what makes us human.

Investing for "good" -- focused on positive environmental, social and human impact -- totals about 1 in 9 investment dollars professionally managed, but has not consistently shown attractive results, as most fund managers exclude firms that make “bad products” (e.g. nuclear power, alcohol, tobacco). While 9 in 10 "socially responsible" investment funds have suffered lower-than-benchmark financial performance, it’s also not unique: about 9 in 10 actively managed funds don’t beat their benchmark (especially after fees and adjusted for risk), including those focused on international and emerging markets.

Plus, nuclear energy produces carbon-free power during its life (once the concrete-intensive plant is built). Brown-Forman’s whiskey brand Jack Daniel’s is quietly focusing on organic ingredients and eco-efficient production (but consumption should be in moderation). And even Philip Morris has claimed that part of its “corporate social responsibility” is increasing the income of tobacco farmers (though its product leads to death and disease). And which energy is "cleaner" - solar, wind or geothermal?

As my mother observes, “no person is all good or all bad, they are a mix of both.” Companies, made up of people, are the same. Yet there is no accepted rating and ranking system of “net good” – the Generally Accepted Accounting Principles (GAAP) don’t even characterize people on the balance sheet, while firms proclaim that “people are our most important asset.” One exception is India-based Infosys in its annual report, with its “return on assets” quantifying the valuing of its human programmers and services staff.

While an increasing number of firms report carbon intensity, renewable energy and water usage to the non-profit Carbon Disclosure Project and in "sustainability" reports, there is not yet required SEC reporting of the value (e.g. say, carbon credits as assets on the balance sheet) or the costs of environmental-related impacts (e.g. a charge to the income statement).

To restore some sanity to today’s accounting, financial and investor systems, we need to quantify the good, as well as the bad. Why? Because they matter to profit. The Wharton School’s Professor Alex Edmans has shown that the “best companies to work for” outperform the general market each year by 300 basis points (3 percent annual return) or more. Analysis by Catalyst Inc., a women’s leadership organization, shows more women on the Board of Directors correlates with higher return on capital. And Hedge Fund Research proved that women hedge fund managers outperform male hedge fund managers over the January 2000-May 2009 period as well as 2008’s crisis year.

Even Goldman Sachs implements portfolios where “good” drives value (though these are mostly unknown, even to its own staff) incorporating environmental, social and governance factors in its fundamental evaluations to create bottom-line shareholder value. Goldman’s former head of global private wealth David Blood started Generation Investment Management and now manages $5 billion in assets (his partner is former VP Al Gore). Nasdaq OMX’s CRD index (ticker: QCRD) – as well as my firm’s HIP 100 Index portfolio – quantifies eco- and social- outcomes that link to financial profit for global multi-nationals. And mutual fund Portfolio 21 has shown since January 2000, as well as the PowerShares Cleantech ETF since November 2006, that eco-efficient companies can do well environmentally and financially for your portfolio. (All funds have the risk of loss as well.)

Greed in the service of good has provided attractive IPOs for SKS Microfinance in India in Aug 2010 and Banco Compartamos in Mexico in October 2008, serving micro-entrepreneurs with loans to grow their business and their family’s quality of life. That’s also why global banks Citigroup, ICICI and ABN Amro are in the microfinance. This industry currently mobilizes $40 billion in fixed-income and equity instruments for global investors.

Rob Walton, chair of Walmart and the late Sam’s eldest son, invested multi-millions into renewable-energy panel-maker First Solar (FSLR), but also encouraged the world’s largest retailer to apply a sustainability scorecard to its 60,000 global suppliers, including those in China (whose own clean-tech investing is larger than the USA’s).

The new fundamentals of investing are here: solving human needs can benefit the bottom line financials. Should Gordon Gekko had recognized this back in 1987, he might not have been lonely at the prison gates when released in the latest movie. In 2010, forward-thinking investors and leaders are already acting on the 21st century’s investment opportunity: Good and greed can be compatible – to better your world, your company and your portfolio.

R. Paul Herman is the author of “The HIP Investor: Make Bigger Profits by Building a Better World” (John Wiley & Sons, 2010); a registered investment adviser in California, Washington and Illinois; and CEO of wealth and portfolio manager HIP Investor Inc. in San Francisco. The investments described in this feature are for information and education purposes only, and are not recommendations nor an offer of securities.