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Annual & Semi-Annual Reports
Our Fund reports are issued in September (Annual) and March (Semi-Annual), and cover the Domini Social Equity Fund, the Domini International Social Equity Fund, and the Domini Social Bond Fund. The reports provide performance commentary, detailed information about our holdings, and financial information about the operation of the Funds. In each report, we also highlight the social impact of our investments.
Letter from the President
Dear Fellow Shareholders:
The year ended July 31, 2013 has been positive for financial markets, both in the United States and throughout the world. Equities outpaced bonds, as confidence that much of the economic woes of the past five years seems to have been worked through. On top of that, the unwinding of the wars in Afghanistan and Iraq has continued apace, allowing Americans to hope that we can return to a more fruitful global economic role. In one regard, however, we Americans have come to see in horrifyingly raw terms some of the downsides of a global economy.
On April 24, 2013, an eight-story apparel factory building, Rana Plaza, collapsed in Dhaka, the capital of Bangladesh. In the end a death total of at least 1,127 people was fixed, with roughly 2,500 more injured. The loss of life was staggering. It was the deadliest garment-factory accident in history. For many Americans, it brought to mind the Triangle Shirtwaist Factory fire, which led to many of our workplace safety laws. It is heartbreaking to think that, 102 years later, we had not exported to the rest of the world basic workplace safety standards. Worse still, it is heartbreaking to think that Americans were significant purchasers of the goods that were being made at Rana Plaza.
This report will focus on the work that responsible investors have undertaken both before and since the events in April. We will also look at corporate initiatives that may lead to a greater respect for basic safety for factory workers at least in Bangladesh, but hopefully globally.
Progress is lagging in shifting the mindset of consumers in advanced nations. There are many reasons that we are unwilling to pay the full cost of, for instance, a new T-shirt. For many of us, it is simply that life presents a constant struggle to make ends meet, and so we feel it is irresponsible to pay more than is necessary. Others seek goods manufactured by companies we believe are responsible in the way that they source their goods, but do draw the line when prices seem too high.
Socially responsible investing can be seen as a customer making an enlightened decision. Certainly we at Domini Social Investments strive to reduce the harm that investors are capable of creating. And we hear from our shareholders that, in addition to pursuing financial goals, they invest with us because they want to be a part of something solution-oriented.
I’ve done a lot of thinking about consumption and the Rana Plaza collapse, and I have come to feel that the move towards either local sourcing or specific person-to-person sourcing is perhaps the most powerful social economic movement of the current decade. No matter where I travel in the United States and Europe (I haven’t been beyond during the past year), I see boastful signs that let me know that the honey was made just up the street or that the peaches are local. When I enter a coffee shop I see the poster about the cooperative on which the coffee was grown and roasted.
At the same time, I understand that globalization will not be reversed, and that it has produced benefits for people. The garment industry represents roughly eighty percent of Bangladesh’s exports. Wages are extremely low, but those are jobs. We need a more humane global economy that supports both the farmer up the road and the working family on the other side of the globe. If the financial crisis taught us nothing else, it taught us that we are all in this together. We must find a way to make globalization work for everyone. This has not, and will not, happen by itself.
Consumers who want to know where and by whom their products were made are quietly reshaping commerce. They create the potential for stronger local economies where a once powerful, but now missing factory once employed thousands. They allow creative entrepreneurs from around the world to find those who want their products and who will pay a fair price for it because the middleman has been removed. And as this demand grows, new technologies, connecting people with each other, are springing up to assist, which in turn makes the purchase easier and the circle stronger.
This past year the world witnessed the horrific result of the old way of capitalism, the hopeful response of some companies that see human life as worth more than a cheap T-shirt, and the rapid expansion of interest in a more personal approach to consumption. It is potentially a flex point and I will be watching the results closely.
Thank you for your investment, and for your commitment to a better world.
Very truly yours,