Some ‘Green’ Investments Called Shams : Finance: A brokerage charges that some of its competitors tout known polluters as environmentally conscious to investors.

As part of a growing demand for standards in the chaotic arena of so-called environmentally responsible investing, Progressive Asset Management, a small brokerage firm, charged today that some financial institutions are marketing known polluters to buyers looking for “green” investments.

Most roundly denounced is John Hancock’s Freedom Environmental Fund, a mutual fund that offers “socially responsible investing” in companies including Waste Management Inc., an immense firm which, according to Progressive Asset Management, has been cited for pollution more than 600 times by the U.S. Environmental Protection Agency.

“In the financial world, the environment has become a marketing sticker,” said Peter Camejo, president and chief executive of Oakland-based Progressive Asset Management. But, said Camejo, the label isn’t always accurate.

Camejo’s charges come in a report on environmental investments that his firm--which also touts itself as specializing in “socially responsible investing”--prepared for the Bay Guardian, a San Francisco-based alternative weekly.

Other funds accused of failing to screen polluters from their environmentally sensitive investment programs are the Merrill Lynch Clean Technical Trust, Fidelity Select Environmental and Swift Financial Trust Environmental Awareness Fund. Other large waste-disposal firms described as major polluters are Chemical Waste Management Inc., a subsidiary of Waste Management, and Browning-Ferris Industries Inc.

In a coordinated move, Ruth Reed Dyke, a community activist from Auburn, Calif., who invested in Freedom Environmental Fund through Progressive Asset Management, has asked the fund to return her $15,000 investment. The broker has also called for the Securities and Exchange Commission to investigate its alleged “deceptive marketing practices.”

“It’s an interesting question,” said John Heine, a spokesman for the SEC. “There’s a lot of debate over what helps, what is socially conscious.” Heine noted that while the SEC doesn’t respond to the complaints of individual investors, it may look into the situation if it comes to be considered “a major one.”

Waste Management’s hazardous waste subsidiary has indeed been cited frequently by the EPA, as have virtually all other companies in similar work. At the same time, Waste Management’s curbside recycling service, Recycle America, has generally been praised by environmentalists.

“The company had problems in the early 1980s,” admitted Waste Management spokesman William J. Plunkett, “which was an experience that awakened the company to address these problems very, very quickly. . . . We realize that sometimes people fail to understand that we are part of the solution, that we are managing the waste generated by others.”

These funds “are just taking advantage of the way the market works,” said Jonathan Schorsch, a research associate at the Council of Economic Priorities, who sees a larger need for standards for environmental business activities.

The council publishes “Shopping for a Better World,” a supermarket guide to environmentally sensitive goods, and also plans to publish later this year a guide to “Investing in America’s Corporate Conscience.”

“Growing pains” says Abe Ohanian of many waste companies’ difficulties complying with environmental regulations. Ohanian is first vice president of Sutro & Co., in Los Angeles, which handles the Freedom Environmental Fund.