Socially and environmentally concerned investors have social, as well as financial, objectives. The Domini Social Equity Fund seeks to meet these objectives by offering a diversified stock portfolio for long-term capital appreciation that is consistent with social and environmental priorities.

 

The Fund makes its social impact felt through the following:

 

• Application of social and environmental standards to the portfolio
• Shareholder activism
• Proxy voting

 

Social Investment Standards

 

The Fund seeks to hold the stocks of corporations that, on balance, contribute positively to the creation of a wealthy and healthy society, as indicated by their relationship with the following stakeholders:

 

• Communities
• Customers
• Ecosystems
• Employees
• Investors
• Suppliers  

 

The Fund seeks to avoid securities and obligations of corporations that do the following:

 

• Derive significant revenues from the manufacture of tobacco products, alcoholic beverages or gambling equipment
• Derive significant revenues from the ownership of gambling enterprises
• Have a significant direct ownership share in, operate, or design nuclear power plants
• Serve as major military weapons manufacturers  

 

By including a company in the Fund’s portfolio, we are not endorsing it as having a completely positive social impact. Indeed, there are few perfect companies in the world.

 

We will invest in companies with a combination of controversies and praiseworthy initiatives when we feel that, on balance, progress is being made toward long-term benefits for society or the environment. We seek to exclude from our funds companies with mixed records where negatives substantially outweigh the positives. Nevertheless, there are a wide variety of companies in our funds’ portfolios that have mixed records, and some may be involved in substantial controversies from time to time.

 

By using social and environmental standards to make investment decisions, socially responsible investors are stimulating demand for powerful global corporations to pay close attention to these issues and to disclose their policies and performance in these areas. An increased level of transparency is critical to establishing a higher level of corporate accountability.

 

Please visit our Global Investment Standards section for more information about how we use social and environmental factors to evaluate our investments.

 

Shareholder Activism

On behalf of Domini Social Equity Fund shareholders, Domini Social Investments frequently raises issues of concern with the management of corporations in our portfolio. Through direct dialogue, we are often successful at bringing issues to management's attention and at setting in motion the wheels of change. Every year, we file shareholder proposals to place important issues on the proxy ballot at companies' annual shareholder meetings.

 

From 1994 through 2006, we filed more than 140 shareholder resolutions at more than 60 companies. We have engaged senior corporate management in extensive dialogue about such issues as sweatshop conditions, environmental performance, and diversity.

 

Please visit our Shareholder Activism section for more information on our current efforts on behalf of our shareholders.

 

Proxy Voting

As a mutual fund manager, we have an important responsibility to vote proxies for corporations in our portfolio. Corporate proxy statements include matters ranging from the approval of the Board of Directors or the company's auditing firm, to social and environmental issues proposed by shareholders. On behalf of our shareholders, we vote every proxy we receive, and we publicly disclose each vote.

 

We consider our proxy voting to be an important opportunity to express our views to corporate management on a wide range of issues. We strongly believe that all mutual fund shareholders have an absolute right to know how their fund managers are voting their shares. That's why in 1999 we became the first mutual fund company to provide public access to our proxy voting decisions, and why we lobbied the Securities and Exchange Commission for the rule that now requires all funds to disclose their votes. We also publish our Proxy Voting Guidelines in advance of every proxy season so that our shareholders know our general position on a wide range of corporate governance and social and environmental issues.