How We Invest
Our Investment Philosophy
We believe that all investments have social and environmental implications. We apply social, environmental and governance standards to all of our investments, believing they help identify opportunities to provide strong financial rewards to our fund shareholders while also helping to create a more just and sustainable economic system.
Our approach enables us to capture sources of risk and opportunity often overlooked by conventional financial analysis. Our indicators also provide us with insight into the quality of corporate management teams, which is a key component of future success.
- Social, environmental and governance factors may have company-specific implications that can affect portfolio performance. These factors can help us avoid certain risks, such as large environmental fines or discrimination lawsuits, and can also identify more resilient companies led by forward-looking management teams.
- Social and environmental factors can also have more general systemic or market-level implications that can affect portfolio performance. We believe that investors can address large-scale, societal level problems such as poverty and climate change if they understand and act upon the social and environmental implications of their investments.
An Innovative Investment Process
Each of Domini’s mutual funds is actively managed according to an innovative strategy that combines Domini’s expertise in responsible investing with the strength of a financial submanager. Domini is responsible for the development and application of the Funds’ social and environmental standards. Subject to these standards, the submanager is responsible for each Fund’s financial standards and portfolio construction. In addition, we engage with companies in our equity fund portfolios to encourage improvements in their social and environmental performance. Domini is also responsible for selecting the Community Development Financial Institutions represented in the Domini Social Bond Fund’s portfolio.
Wellington Management Company LLP is responsible for the Domini Social Equity Fund and Domini International Social Equity Fund’s financial standards and portfolio construction. Wellington Management is a professional investment counseling firm which provides investment services to mutual funds, employee benefit plans, endowments, foundations, and other institutions. Wellington Management and its predecessor organizations have provided investment advisory services for over 70 years. As of July 31, 2013, Wellington Management had investment management authority with respect to approximately $793 billion in assets.
Seix Investment Advisors LLC is responsible for the Domini Social Bond Fund’s financial standards and portfolio construction. Seix Investment Advisors is a wholly owned subsidiary of RidgeWorth Capital Management, Inc. Seix Advisors was founded in 1992 and is dedicated exclusively to fixed income investing for institutional investors globally. As of September 30, 2013, Seix had approximately $26.8 billion in assets under management, including over $3.7 billion in socially responsible assets.
We consider our proprietary research framework, implemented by an in-house team of analysts, to be industry leading, and a key differentiator for our firm. Our evaluation of companies takes into account each firm’s core business model and its implications for social and environmental sustainability. We then evaluate the health of each company’s relationships with its key stakeholders, such as local communities or employees. We have developed several hundred industry-specific key performance indicators to guide our research and ensure we focus on the most important factors.
We are strong believers in using all tools at our disposal to improve corporate social, environmental and governance performance. We are active participants in the corporate governance process, through proxy voting and more direct forms of shareholder activism. Since 1994, we have filed more than 200 shareholder proposals with more than 80 large corporations on a wide variety of issues, and engage in long-term dialogues with corporate management teams. Our efforts have resulted in greater transparency and important policy changes at some of the largest corporations in the world. We also engage in the public policy process, when appropriate, to advance these goals.