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Second Quarter 2010

 

Protecting Consumers from Toxins in Products

 

Domini has addressed the issue of toxins in consumer products for years, through our Global Investment Standards and our direct engagement with companies. During the quarter, Domini’s shareholder proposal addressing Coca-Cola’s use of bisphenol-A (BPA) in the linings of its beverage cans received a strong 22% vote at the company’s annual meeting, in addition to substantial press coverage. This was the first shareholder proposal ever filed to focus on BPA.

 

BPA is a chemical used in the lining of cans, where it can leach into foods and beverages. Canada has banned the use of BPA in baby bottles, and a recent report by the President’s Cancer Panel noted a “growing link between BPA and several diseases, including various cancers.” We would like to see the company actively pursue safer alternatives, and although we have not been satisfied to date, we look forward to continued dialogue.

 

Shedding Light on Corporate Political Activity

 

The U.S. Supreme Court’s January deci­sion in Citizens United vs. Federal Election Commission removed limits on corporate financing of election advertising targeted at specific candidates and issues. We expect to see the majority of this spending flow through trade associations and other tax-exempt entities that can serve as conduits for corporate political spending.

 

Domini’s proposal asking Goldman Sachs to reveal its contributions to politically active organizations, including trade associa­tions, received a very strong 37% vote at the company’s annual meeting. The New York City Public Advocate issued a press release and held a rally outside Goldman’s annual meeting in support of our proposal. Our dialogue with Goldman continues.

 

Measuring the Impact of Companies on Forests

 

During the quarter, Domini endorsed the Forest Footprint Disclosure Project, a new initiative supported by the British government and modeled on the Carbon Disclosure Project. The Forest Foot­print Disclosure Project, which represents investors managing more than $4 trillion, surveys companies about their impact on forests through their exposure to four key commodities: timber, beef, soy, palm oil, and biofuels.

 

We filed a shareholder proposal asking Procter & Gamble to describe how it assesses the impact of its supply chain on deforestation, and how it plans to mitigate this im­pact. P&G is a major consumer of palm oil, and demand for palm oil has driven the conversion of natural forests to palm oil plantations in Indonesia and Malaysia. We withdrew our proposal when P&G agreed to continue dialogue and improve its report­ing on these issues.

 

Seeking Better Conditions for Electronics Workers

 

During the quarter, global attention was drawn to a spate of suicides among factory workers at a 400,000-worker Foxconn factory in southern China. The factory makes iPhones, iPads, and other products for Apple, in addition to products for Dell, Hewlett-Packard and others.

 

Domini helped lead a broad coalition of over 40 European, Australian and U.S. investors in calling for better conditions for Chinese factory workers. In a public statement, the coalition condemned abusive workplace conditions in the global electronics supply chain and called for a renewed focus on working conditions by both companies and investors.

 

Internet Censorship and Surveillance

 

For the sixth consecutive year, we refiled a shareholder proposal asking Cisco Systems to address its impact on human rights. The proposal asks the company for an “Internet Fragmentation Report” that would document Cisco’s efforts to protect the Internet from government censorship and surveillance.

 

Current Shareholder Proposals

 

  • AT&Tand JPMorgan Chase (political contributions, omitted at SEC)
  • Cisco Systems (Internet freedom, pending annual meeting in November)
  • Coca-Cola(toxins in consumer products, 22% vote)
  • Goldman Sachs(political contributions, 37% vote)
  • International Paper(sustainable forestry, withdrawn)
  • Nucor(slavery in Brazil, withdrawn)
  • Procter & Gamble(sustainable forestry and palm oil, withdrawn)
  • RR Donnelley(sustainable forestry, 10% vote)

 

 

As of June 30, 2010, Apple, AT&T, Cisco Systems, Coca-Cola, Dell, Goldman Sachs, Hewlett-Packard, International Paper, JPMorgan Chase, Nucor, Procter & Gamble, and RR Donnelley represented 4.5%, 3.8%, <0.1%, 0.3%, <0.1%, 0.9%, <0.1%, 0.6%, 2.6%, 0.2%, 0.4%, and 1.6%, respectively, of the Domini Social Equity Fund’s portfolio. Foxconn was not held by the Domini Funds. The composition of the Funds’ portfolios is subject to change.

 

The Domini Funds are subject to market risks and are not insured. You may lose money. This information is provided for educational purposes only, and should not be considered investment advice with respect to any of the holdings listed. The Funds’ portfolios are subject to change.

 

 





You should consider the Domini Funds' investment objectives, risks, charges and expenses carefully before investing. View or order a copy of the Funds' current prospectus for more complete information on these and other topics. Please read the prospectus carefully before investing or sending money.

For more information about the Domini Funds or to speak with a shareholder representative, call 1-800-762-6814. DSIL Investment Services LLC, Distributor.

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