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Social Screens
A
comprehensive set of about 100 social and
environmental screens are applied to the Domini 400 Social Index.
The underlying philosophy for the screens is that companies with
fewer environmental liabilities, more diverse boards and workforces,
generous employee benefits and authentic commitments to their communities
are better positioned to succeed and prosper. Domini assesses the
many ways in which a company impacts all its stakeholders, including
shareholders, employees, communities and the natural environment.
It does not invest in companies or other issuers that manufacture
tobacco or alcohol, or derive revenues from gambling operations,
or the ownership or operation of nuclear power plants. It also excludes
major military contractors and firearms manufacturers. When screening
companies in which to invest, Domini examines the following qualities:
* Corporate citizenship—companies
with innovative and generous charitable giving programs with a particular
emphasis on programs promoting economic and social justice.
* Diversity—companies
with women and minorities in management positions and on the board
of directors as well as those that have a record of purchasing from
or investing in women- and minority-owned businesses. It also looks
for companies with strong employee benefit programs that address
work/family concerns such as childcare, elder care and flextime,
as well as companies that recognize innovative hiring programs for
the disabled as well as progressive
policies toward gays and lesbians.
* Employee relations—companies
with a commitment to worker involvement/ownership through employee
stock ownership, cash profit sharing and employee participation
in management decision-making. It also looks for companies with
histories of fair labor negotiations and strong retirement benefits.
* Environment—companies
that show respect for the natural environment, which is demonstrated
by the product or service the firm provides or exhibited through
in-house recycling or pollution-prevention programs, gifts to conservation
groups or other ways of conducting day-to-day business.
* Non-U.S. operations—companies
that pay fair wages, support human rights and protect the environment
where they operate in less developed countries. It also looks for
companies that enforce a code of conduct in choosing where and with
whom they will do business.
* Safe and useful products—companies
that provide high-quality products and are industry leaders in research
and development.
More detailed information on the screens
can be found on the Domini Web site at www.domini.com. KLD is the
social research firm that created and maintains the Domini 400 Social
Index.
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