Warning: Social investing may be hazardous to your wealth.

"Social responsibility" in making pension fund investments has become a hotly debated topic among institutional investors in the past year. Proponents claim billions of dollars are being invested against the best interest of beneficiaries. Opponents cite the duty of fund managers to get the best possible return on investments, regardless of their nature. The middle ground holds that social investing should be encouraged so long as the return is as good.

At stake is a $565 billion reservoir of pension fund assets, one of the largest pools of capital anywhere.

The debate began with publication of the book "The North Will Rise Again: Pensions, Politics and Power in the 1980s" by Jeremy Rifkin and Randy Barber. They exhorted labor leaders in the aging industrial states to demand that retirement contributions be reinvested in their areas rather than in the largely nonunionized South that was taking away their livelihood.

The controversy has raged ever since among academics, trustees, and union and government officials. The Employe Benefit Research Institute will sponsor a debate on Thursday on social investing, with Karen Ferguson, director of the Pension Rights Center here, arguing in favor and Prof. Roy Schotland of Georgetown University Law School arguing against.

Following the book, a "social audit" was published last summer by two nonprofit groups, Corporate Data Exchange and the Peoples Business Commission. It studied 142 of the largest public and private U.S. pension plans in an effort to find out how much money was invested in the stock of companies that are nonunion, violators of work safety and health regulations, violators of equal opportunity laws and major investors or lenders to South Africa.

At the end of 1976, some 118 public and private union-related pension plans held $30 billion worth of stock in companies fitting all these categories. The study lists 99 companies and the reasons why they should be excluded from union pension fund portfolios.

A new study by Computer Directions Advisors reports on the performance of stocks of those 99 companies. The computer analysis was done at the request of Pensions & Investments, a publication that is editorially opposed to social criteria. The new study found the price of stocks on the list had risen 109.2 percent in the past five years, while Standard & Poor's 500-stock index was up only 72 percent in the same period.

CDA then studied the stocks most commonly held by pension funds and found that 38.3 percent of them appeared on the list of companies the earlier report had characterized as socially undesirable. These stocks had an average appreciation of 83.5 percent over the last five years, while those not on the list rose 76.8 percent.

In the past few years, a number of universities have decided -- sometimes as a result of campus demonstrations -- to divest their portfolios of stocks of companies doing business in South Africa. Some even have done so although it meant a financial loss.

The favorite stocks of pension managers that would be sold under "socially responsible" criteria because they are nonunion companies are American Home Products, Delta Air Lines, Digital Equipment, Dow Chemical, Eastman Kodak, Exxon, K mart, McDonald's, Mobil, Procter & Gamble, Raytheon, R. J. Reynolds, Schlumberger, Sears, Standard Oil of California, Standard Oil of Ohio, Texaco and Texas Instruments.

Those that would be banished because of involvement in South Africa are: Amax, Caterpillar Tractor, Citicorp, Coca Cola, Deere, Firestone Tire, Ford, General Electric, General Motors and IBM.

Those CDE deemed guilty of violating equal opportunity laws are AT&T, Cities Service, Halliburton, Philip Morris, Phillips Petroleum, Safeway Stores and UAL.

Those cited for Occupational Safety and Health Adminsitration violations are Bethlehem Steel, Du Pont and U.S. Steel.