Each industry presents its own set of sustainability challenges. We therefore believe it is appropriate to evaluate each company within the context of its industry. In doing so, we have established key indicators for each industry and subindustry. For the mining industry, for example, safety is of utmost importance. For the chemical industry, the environment is crucial. For the apparel industry, labor standards at suppliers are among the greatest challenges.

Domini tailors key indicators not only to the industry but to subindustries, making meaningful company-to-company comparisons possible. Domini has identified four to seven subindustries for each of the 24 major industry categories we use.

We have found that approximately three key indicators for stakeholder relations and three for business alignment are necessary to identify critical issues for each subindustry.

To illustrate the great diversity of key indicators for contrasting businesses, below we list our key indicators for seven very different subindustries:

• Airlines
• Apparel and toys
• Commodity chemicals
• Forest products, pulp and paper, and building materials
• Insurance, annuity, and brokerage
• Snack foods, candy, and beverages
• Software and Internet services

Note on Excluded Industries

Domini will exclude from our portfolios companies significantly involved in the fundamentally misaligned subindustries of alcohol, tobacco, gambling, weapons manufacturing, and nuclear power.

If a company derives more than 10% of revenues from production of alcoholic beverages, tobacco products, or weapons, or from the operation of casinos or the provision of gambling services, or owns more than 10% of a nuclear power plant, its involvement is considered significant and will generally be ineligible for investment.

Companies with less significant involvement in these areas may also be considered ineligible for investment, but are evaluated case by case. In these cases, we consider the absolute size of the involvement, the trend of the company’s involvement, and the prominence of the company’s role in the subindustry, along with the company’s overall social and environmental record in making our decision.

For companies peripherally involved in these subindustries (i.e.,retail sales of alcohol and tobacco, licensing of names to the alcohol, tobacco, and gambling industries, or provision of key parts to these industries), those with more than 50% of revenues from these activities are also generally considered fundamentally misaligned and classified as ineligible for investment.

Those companies with 10% to 50% of revenues from these activities are evaluated case by case. In these cases we consider the absolute size of these revenues and the trend of the company’s involvement in the subindustry, and balance these factors against positives in its overall business model or stakeholder relations.

As noted above, certain other partially misaligned businesses are generally excluded from our portfolios, including for-profit companies in the fields of healthcare, primary school education, prisons, and security, as well as major producers of synthetic pesticides and agricultural chemicals.

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.

Past performance is no guarantee of future results.The Domini Funds are subject to market risks and are not insured. You may lose money.