The Climate Transition

Many everyday products—like plastics, fertilizers, and even clothing—are made using fossil fuels. This is why we are joining ShareAction and other investors to engage with chemicals companies on their decarbonization strategies. In an engagement with Koninklijke DSM, N.V., we acknowledged the company’s climate commitment and innovations.  We continue to urge DSM to speed its transition toward using bio-based and natural inputs instead of fossil fuel-based materials.

At the same time, one of our greatest defenses against the climate crisis, the Amazon rainforest, is under increasing threat. Deforestation is at its worst levels in decades,¹ approaching a potential tipping point, beyond which the ecosystem will not be able to recover from drought and land use change.²  We are using our voice with policy makers and government leaders in Brazil as we continue to advocate that they preserve the rainforest using a strong legal framework and enforcement mechanisms, protect the rights of Indigenous peoples, and increase supply chain transparency. 

1. https://news.mongabay.com/2022/03/amazon-deforestation-starts-2022-on-the-fastest-pace-in-14-years/
2. https://www.nytimes.com/2022/03/07/climate/amazon-rainforest-climate-change-deforestation.html

Access to Affordable Insulin

No one should have to forego or ration the medicine they need because of its price. Unfortunately, in the United States, many people living with diabetes who take insulin daily are struggling with its rising costs.³ High prices are most detrimental to patients who are economically vulnerable or under-insured. This is especially acute among communities of color, which have both a higher burden of disease from diabetes⁴ and are disproportionately represented among low-income, uninsured, and under-insured populations.⁵

Lawmakers have been examining this issue for years, and there may soon be legislation to cap out-of-pocket monthly costs or lower insulin list prices.^6,7 We initiated engagements with two of the three major insulin manufacturers, Sanofi and Novo Nordisk, encouraging them to take steps to lower costs for patients. We’re seeking to understand how their pricing principles work in practice—and we want more clarity on what they are doing to make sure that people living with diabetes, whether they are insured or not, have affordable access to the medicine they need.

3. https://www.mayoclinicproceedings.org/article/S0025-6196(19)31008-0/fulltext
4. https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(21)02315-1/fulltext
5. https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2020/02/19/there-are-clear-race-based-inequalities-in-health-insurance-and-health-outcomes/
6. https://www.nytimes.com/2022/03/31/health/insulin-price-house-bill-democrats.html
7. https://www.finance.senate.gov/chairmans-news/grassley-wyden-release-insulin-investigation-uncovering-business-practices-between-drug-companies-and-pbms-that-keep-prices-high

Evaluating Exposure To The Conflict In Ukraine

Domini is closely monitoring how companies are addressing the war in Ukraine initiated by the Russian government. While we don’t currently invest in any companies domiciled in Russia, the conflict may have broader impacts. We engaged 15 companies in banking, technology, insurance, and other sectors to gather more information. We want to see companies conduct enhanced human rights due diligence to prevent or minimize any potential human rights impacts associated with company business. 

Companies are currently faced with an array of complex decisions which may present legal, financial, operational, and physical risks. They’re deliberating how to comply with sanctions, whether to exit the conflict-affected region (regardless of sanctions), and how to carry out their plans responsibly. Companies are also grappling with how they will balance human rights expectations—around access to food, medicine, and information—with their responsibilities amid conflict.

It has been more than a month since the initial invasion, and the conflict continues to take a devastating human toll. We aim to engage in dialogues that shed light on companies’ human rights policies, oversight methods, and risk management systems.

Company Highlights

Demonstrating solidarity with the people of Ukraine

---

Amidst Conflict

Doing business and respecting human rights in high-risk areas

Opposition to war is perhaps the most essential, emboldened through-line in the evolution of ethical investing. War is catastrophic and painful—and the collective mission to promote peace has been a cornerstone of ethical investing since its beginnings.

Unfortunately, right now, this mission demands our attention. A spate of international conflicts, civil wars, and other violent disputes have caused tragic losses of life and severe humanitarian repercussions. A UN assessment in 2021 revealed that over 84 million people were forcibly displaced by war, violence, and persecution—the most since the end of World War II.¹¹ 

This year, Russian government’s invasion of Ukraine has brought conflict to the fore of the ethical investing conversation. Shareholders need to know whether the companies they invest in are prepared to respond to conflict and respect the human rights of all those affected.

What role do companies play?

Companies are not neutral actors. They can exacerbate conflict and profit off it. Reckless or ill-intentioned companies can endanger their own employees, customers, suppliers, and local communities.^{12, 13}

On the other hand, their wide resources and international presence allow companies to help reduce harm in dire situations. They can be instrumental in providing conflict-affected communities with access to food, water, and medicine. They can help people receive information and communicate with loved ones, near and far.¹⁴ Companies also have legal obligations to comply with international sanctions.

What are the best practices?

When operating in conflict-affected areas, companies need to conduct their due diligence, as defined by the United Nations Guiding Principles on Business and Human Rights. This detailed guidance directs companies on how to assess the human rights impacts of their operations, remedy harms they may have contributed to, and report these outcomes to stakeholders.¹² 

The foundation of Domini’s approach

Conflict presents distinct challenges for companies and investors. For decades, Domini has engaged with companies operating in conflict-affected areas, urging them to conduct enhanced due diligence that prevents human rights abuses. 

Universal human dignity, one of two fundamental goals embedded in our Impact Investment Standards, guides how we approach conflict. It’s the bedrock of our position to exclude investments with significant ties to weapons production, nuclear power, and fossil fuels—three elements that have intensified the complexity in Ukraine. 

How we take action

With our standards in place, we’re able to respond quickly as conflicts unfold. First, our in-house research team carefully analyzes how countries and companies are being impacted. Then we initiate dialogues with portfolio companies, urging them to respect human rights by adhering to UN-defined best practices and, further, by enacting programs that support conflict-affected communities and refugees. Companies can improve their conflict responses by consulting experts, peer companies, civil society groups, and government actors. 

From there, we remain steadfast. Conflicts can be lengthy and complex, so our initial response rarely means our work is done. 

11. https://www.unhcr.org/en-us/news/press/2021/11/618bec6e4/unhcr-conflict-violence-climate-change-drove-displacement-higher-first.html
12. https://www.ohchr.org/sites/default/files/Documents/Issues/Business/Intro_Guiding_PrinciplesBusinessHR.pdf
13. https://www.accessnow.org/digital-rights-ukraine-russia-conflict/
14. https://ccc.bc.edu/content/ccc/blog-home/2022/03/companies-respond-to-war-in-ukraine.html