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5 star bond fund with a green heart and even greener profits

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In the never-ending hunt for yield, is it possible to realize outsize yields while at the same time doing good?

That's what the folks at pension giant TIAA-CREF are trying to do with a socially responsible fund focused on bonds issued by firms leading the way in environmental, social and governance (ESG) performance which often includes renewable energy, green technology and affordable housing.

Read MoreTIAA-CREF: Buy Europe, skip China

These proactive investments are selected by TIAA-CREF portfolio manager, Steve Liberatore, who oversees nearly $7.5 billion dollars total in socially responsible bond strategies, including the TIAA-CREF Social Choice Bond Fund.

Thursday on CNBC's "Power Lunch," Liberatore explained why ESG investing should play a important role in an investor's portfolio.

"It's not only the right thing to do from a societal perspective, it also makes better financial sense" said LIberatore.

Morningstar ranked it #1 in its intermediate fund category for all of 2014 and awarded it the coveted five star rating. Lipper ranked it among the top of all intermediate bond funds earlier this year.

"We apply rigorous evaluation for each security," said Liberatore. "Our funds are core actively managed strategies benchmarked to common fixed income indices. We want each selection be an ESG leader in its space, while generating outperformance at the same time."

A top holding in the fund is Topaz Solar Farms LLC, a 550 megawatt solar electric generation plant located in San Luis Obispo County, California.

The issuer is MidAmerican Energy Holdings, a wholly owned subsidiary of Warren Buffett's Berkshire Hathaway. "Topaz will represent the largest-capacity solar electric generation facility in the country," said Liberatore.

Read MoreThe green bond boom by the numbers

Last year, the U.S. market for green bonds reached $3.25 billion, yet still make up less than one percent of the more than $1.5 trillion in U.S. corporate bond issues.

According to Climate Bonds Initiative, the largest green bond issuance by currency is Europe, with $15.2 billion, followed by the U.S., at $10.4 billion.