Choosing Our Investments
Domini’s approach to responsible investing begins with our Global Investment Standards. These standards are directed toward two fundamental objectives: the promotion of universal human dignity and the enrichment of our natural environment.
Making Better Decisions
A company’s social and environmental record can speak volumes about its resiliency, its future prospects and its ability to produce value for society over the long-term. Investors have an important role to play by monitoring and evaluating the companies they invest in to ensure that profit-making is consistent with our shared interests as a global community.
Rigorous application of our social, environmental and governance standards enables us to identify strong long-term investments. It also helps to build the demand for data on corporate social and environmental performance and to communicate our expectations to corporations and other investors. Our fixed income standards seek to take advantage of the unique opportunities provided by that asset class to play a constructive role in community economic development.
We believe our approach, which evaluates how a corporation treats its stakeholders, such as communities, employees and the environment, can help to identify and manage risks not normally considered by traditional analysts. Conversely, we believe corporations that treat their stakeholders well will be rewarded over the long-term, and these forward-looking practices can also help identify opportunities overlooked by others.
Domini provides an approved list of companies that meet our standards to Wellington Management, the subadviser for the Domini Social Equity Fund and Domini International Social Equity Fund, and to Seix Investment Advisors, the subadviser of the Domini Social Bond Fund. These firms then use financial analysis to construct the portfolios.
Evaluating Corporations -- Our Research Process
We believe that our proprietary research process, implemented by an in-house team of research analysts, is industry-leading and a key differentiator for our firm.
Every investment presents a mix of positive and negative social and environmental impacts. A coal mining company faces very different sustainability challenges than a pharmaceutical or a telecommunications company. Our process is therefore grounded in each company’s core business model to ensure that we focus on what is most important for each company. Learn more about how we use key performance indicators to identify the most pressing sustainability challenges faced by each company.
Approving Corporations for our Funds
Once our analysts have completed their research and created a profile for a company, we must then determine whether the company is eligible for our funds. This is the task of our Investment Committee, chaired by Amy Domini. We’re not seeking perfection. We’re seeking to understand whether a company is wrestling with the key sustainability challenges it faces. Learn more about how we assess the alignment of each company with our Global Investment Standards, and approve companies for our funds.
Bond Fund Standards
Fixed-income investors have an important opportunity to address many of the financial disparities that exist in our society today. The Domini Social Bond Fund seeks to play a positive role in the economic development of our communities while simultaneously seeking to achieve competitive returns for our Fund’s investors. The Fund’s investment standards focus on three key themes:
- Increasing access to capital for those historically underserved by the mainstream financial community;
- Creating public goods for those most in need; and
- Using financial innovation in the service of the economically disadvantaged.
These three themes flow from our belief that healthy economies must be built on a strong foundation of fairness and opportunity. Learn more about the investment standards we apply to our bond fund.
Community Impact Gradient
In the field of responsible investment, much attention has been paid to corporate social responsibility. Less attention has been paid to the role that fixed income investments can play. These investments, however, can have a broad range of impacts on local communities. A corporate bond has a very different impact than a security designed to finance multi-family housing or to build a school. We have developed a Community Impact Gradient to measure the level of community development impact for each investment in the Fund.