Excerpted from our Third Quarter 2025 Impact Update
As highlighted by the Intergovernmental Panel on Climate Change (IPCC) in its Sixth Assessment Report1, the pace and scale of climate action remain insufficient, and every increment of global warming brings more widespread and pronounced extremes. As a global community, climate change presents an unprecedented challenge with enormous and widespread environmental, social, and economic impacts. We already see daily reports of rising temperatures and extreme weather events contributing to increased drought, biodiversity loss, food insecurity, health crises, and displacement.
For investors, climate-related risks are material to both short- and long-term value creation and preservation, impacting portfolios across time horizons, asset classes, geographies, and sectors. As impact investors, we also recognize that climate change mitigation and adaptation are essential to achieving a future where universal human dignity and ecological sustainability can persist. In recognition of the urgent and systemic risks that climate change poses to our planet, society, financial markets, and portfolios, we have adopted a formal Investment Policy Statement on Climate Change, including a portfolio alignment and implementation strategy.
We have long considered the impacts and risks of climate change across all our investment strategies and decisions through the application of our firmwide Impact Investment Standards and industry-based key performance indicators, as well as through our proxy voting, company engagements, and public policy advocacy. The Domini Funds have never invested in coal and have been fully divested from fossil fuels for many years. We actively seek investments that promote long-term environmental sustainability, and we encourage companies across all sectors to address climate-related risks and support the low-carbon transition, including through time-bound transition strategies that incorporate science-based greenhouse gas (GHG) emissions-reduction and net-zero targets, physical climate risk assessments, just transition strategies that center workers and communities, and enhanced climate-related disclosures.
With our new climate policy, we are now further stepping up our commitment to decarbonizing our Funds’ portfolios and reducing their exposure to climate-related risks, including physical and transition risks. In accordance with well-established scientific consensus, we will seek to achieve net zero portfolio-level emissions across our portfolios by 2050 in order to align with global efforts to limit warming to 1.5°C above pre-industrial levels.
As we adopt holistic approaches to help reduce portfolio emissions and address climate-related risks and opportunities, we will prioritize the following strategies and frameworks that will inform and guide our investment research, engagement, and advocacy priorities:
We will seek to maintain a system-level perspective that can help us to better understand complex challenges and how they affect portfolio companies and enhance our ability to assess risks by considering structural causes, rather than just symptoms, of specific challenges.
We will seek to utilize intersectionality frameworks that can allow for more nuanced understanding of complex issues and help to uncover hidden risks and opportunities that might otherwise be overlooked.
We will elevate consideration of business-model transformation, seeking to identify climate-aligned business models across industries, as well as best practices and specific pathways to such transformations.
It is our hope that these strategies will help the Domini Funds to achieve net zero and contribute to broader efforts to mitigate real-world GHG emissions and climate-related risks. In doing so, the Funds’ shareholders can help address the root causes of the climate crisis, support solutions for those who are most vulnerable, and help build a more just and equitable economy, all while driving sustainable long-term value creation.