Domini's ESG Analysis Avoided Drug Company's Fall
In June, Bloomberg Markets interviewed Domini’s Tessie Petion, VP of Responsible Investment Research & MIS, to discuss how Domini’s ESG (environmental, social and governance) criteria helps their investors avoid volatile companies, such as the drug maker Valeant. Bloomberg noted that Valeant was once a provider of generic drugs and contraceptives in emerging markets and began cutting its research and development budget rapidly acquiring over 100 companies within five years. In the interview, Ms. Petion noted that Valeant’s focus had shifted from the development of lifesaving drugs to a strategy of financial engineering, and therefore no longer aligned with Domini’s investment approach. Domini excluded the company from eligibility for investment in its mutual funds in October 2014 and watched from the sidelines as Valeant stock price subsequently crashed.