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Domini assesses the extent to which the businesses of companies are aligned with our standards. Businesses may be considered fundamentally aligned, partially aligned, partially misaligned, or fundamentally misaligned.
Domini considers companies’ businesses fundamentally aligned with our standards when they do the following:
- Pioneer innovative products that address the most pressing problems of our times. These currently include non-fossil-fuel energy, pollution prevention equipment, disease prevention, and accident risk mitigation.
- Pioneer access to wealth-creating, sustainable products for sectors of society or the environment that are currently underserved. These currently include mobile telephones, Internet access, and microfinance.
Domini categorizes most companies’ businesses as partially aligned with our standards. When stakeholder relations are appropriately managed, we believe these businesses can contribute value to society and the environment.
Domini considers companies’ businesses partially misaligned with our standards when they do the following:
- Contribute to global warming to a major degree. These include oil and coal companies, automobile and truck manufacturers, and electric utilities.
- Undercut the provision of basic public goods. These include for-profit companies in the fields of healthcare, primary school education, prisons, and security.
- Pose substantial, avoidable threats to the environment. These include pesticide manufacturers, gold and diamond mining companies, and waste management companies.
Domini considers companies’ businesses fundamentally misaligned with our standards when they do the following:
- Cause severe harm to customers by, for example, producing addictive and harmful products and services. These include tobacco, gambling, and alcohol companies.
- Threaten geopolitical stability. These include nuclear weapons manufacturers, international arms dealers, uranium mining companies, and nuclear power utilities.
“Fundamentally misaligned” companies are not eligible for inclusion in the Domini Funds.
Domini may, at its discretion, choose to change its social or environmental standards, add additional standards, or modify the application of the standards to a Fund at any time, without shareholder approval. This will impact investments held by a Fund, and may cause certain companies, sectors, industries, or countries to be dropped from or added to a Fund’s portfolio. In addition, Domini reserves the right to vary the application of these standards to a Fund, depending, for example, on such factors as asset class, industry and sector representation, market capitalization, investment style, access to quality data on an issuer’s social or environmental performance, and cultural and political factors that may vary by region or country.