The Original Influencers

Originally appeared in The Domini Funds 2021 Annual Report

Amy Domini began her career as a stockbroker. She was fascinated when a client told her they wouldn’t invest in destructive mining operations. She listened when another told her they wouldn’t invest in tobacco companies. Or forestry operations. They wanted to invest in companies that helped society; companies that offered clean energy, paid fair wages, and cared about environmental sustainability and human rights. These clients were investors, they were shareholders, and they were Amy Domini’s original influencers. And they have lived up to their name, as their ethical ways of investing inspired Amy to join with Steve Lydenberg to launch the Domini 400 Social Index in 1990 — even though, as Amy has said, “Wall Street thought we were completely nuts. They didn’t think we could ever get the same kind of returns including ethical standards in our investment decisions and they didn’t think investors really cared.”

Shared values. Mutual fund.

Since Domini’s founding, Amy has inspired thousands of individual and institutional investors to join her on her quest for universal human dignity and ecological sustainability. She wrote or co-wrote five books, started a research company, launched mutual funds, and dedicated herself to advocating investing ethically, seeking positive planetary impact and universal human dignity. The Domini Impact Equity Fund, which launched in 1991, was the first socially and environmentally screened index fund in the world.

Fierce standards. Gentle caring.

Amy’s goals of universal human dignity and ecological sustainability led to one set of standards that would allow for their achievement: the Domini Impact Investment Standards. Universal to all of our products, these environmental and social standards have stood the test of time, continuing to help us identify long-term investments across both our equity and fixed-income strategies. Why? Because what gets counted counts. When ethical investors invest in low carbon footprint companies, other companies start paying attention to their own carbon footprint. When we boycott companies aiding warlords, companies reconsider aiding warlords for profit.

It all begins with seeing simple truths. It begins with the collective realization that the secret to making an impact is small. Together, we can each do something — and this, in the end, is everything.”

Amy Domini

Our Impact Investment Standards have two fundamental goals:

Universal Human Dignity
We seek investments that promote universal values of fairness, equality, justice, and respect for human rights.

In 2020, many of our investments worked to address structural barriers by directing capital and providing economic opportunity to historically underserved communities in the U.S. and around the world. For example, we are invested in a bond issued by the MacArthur Foundation that funds organizations and initiatives that address the economic and social challenges resulting from the COVID-19 pandemic, particularly among communities of color.

Ecological Sustainability
We seek investments that promote long-term environmental sustainability, including climate change mitigation and adaptation.

Many of our investments support the Paris Agreement, including the generation and expansion of access to water and affordable renewable energy, green buildings, energy efficient and water efficient infrastructure, clean water, and climate mitigation and adaptation policies. For example, we are invested in Consolidated Edison, a utility that owns and operates renewable energy infrastructure projects and is the second largest solar energy producer in North America.

Proposing better: When a shareholder is at their best.

Shareholders have the power to put forward proposals. Shareholder proposals are when we make recommendations that a company or board of directors take action, and these proxy proposals have proven to be a highly effective corporate accountability tool. In fact, we’ve been driving corporations to do better since we made our first shareholder proposal in 1994. In 2020, we filed our 300th, continuing to hold companies accountable for their social and environmental impacts. We may be small, but we pack a punch.

The goal with shareholder proposals is to encourage companies to work with us and with our non-governmental organization (NGO) partners to make progress on an underlying issue such as human hardship at agricultural facilities or inappropriate waste treatment. Often, our proposals motivate companies to work together with our partnership and we reach an agreed upon advancement. In these cases, we are pleased to withdraw the proposals. If not, they are included in proxy statements and presented at corporate annual meetings, where they are put to a vote.

Last year we filed eight shareholder proposals with companies on topics related to climate policy, executive compensation, and drug pricing. We successfully withdrew seven of our proposals after reaching agreements with the companies. For example, we recommended that Tesla publish a Diversity, Equity, and Inclusion report — and they did. The results of our proposals do not always lead to success this immediate, but they almost always bring the conversation forward.

Innovation and determination.

Innovation is also a key driver of influence. If there are no fixed-income funds that incorporate social and environmental standards, for example, sometimes the solution is to create one yourself. When it launched in 2000, the Domini Impact Bond Fund was one of the first of its kind. Today it continues to provide its shareholders the opportunity to help build healthy communities through an intermediate-term, investment-grade U.S. fixed-income portfolio combining Domini’s environmental and social research with a fundamental analytical approach to security selection. In 2020, the Domini Impact Bond Fund had $20.3 million invested in green, social, and sustainability bonds.

Fund something mutual.

In 2020, we continued on our innovation journey, creating new mutual funds that excite our investors and push the field forward. The launch of the both the Domini Sustainable Solutions Fund and the Domini International Opportunities Fund brought our fund family to five.

Our Sustainable Solutions Fund invests in companies that make products or provide services that advance progress toward meeting key problematic areas facing society. Such issues as access to healthy food, capital for small businesses, education, affordable health care, or provision of clean energy, public transit, and affordable housing guide our purchase decisions. An equity fund, the Domini Sustainable Solutions Fund provides shareholders the chance to help address many of the world’s sustainability challenges through high-conviction exposure to solution-oriented companies around the world.

The new Domini International Opportunities Fund is also an equity fund. It provides shareholders core exposure to developed international stock markets through a diversified portfolio of mid-to-large-capitalization companies that demonstrate peer-relative environmental and social leadership, and opportunistic exposure to solution-oriented companies focused on themes such as a low-carbon future, building sustainable communities, health and well-being, among others.

Through these two Funds, as well as the Domini Impact Equity Fund, we seek to invest in companies that support the following sustainability themes:

Independent firm. Independent research. Collective influence.

Independence is a key driver of impact — and influence. Domini is one the few independent impact investment firms left. Our research reflects our independence. Due to our impact investing standards, we’re constantly reassessing how to better capture risks and opportunities. Our proprietary key performance indicators (KPIs) ensure we’re vigilantly focused on the most pressing sustainability challenges in the context of a company’s business model and industry. Last year we refined and enhanced our KPIs to codify diversity metrics universally across all industries. We also updated KPIs for the financial sector to further address climate change and deforestation. Our independence provides us with an unique opportunity to pursue any area of debate and to seek solutions in highly innovative ways.

Projects, plans, and prosperity.

We believe that reforestation is key to mitigating climate change and preserving our planet. That is why we launched our Forest Project, to highlight this fact: forests matter. We can better understand the drivers of forest destruction, its impact on our investment decisions, and how to encourage ourselves, corporations, and governments to become forest value creators. Our core goal of ecological sustainability demands we share our leadership on this issue.

Our Racial Justice Action Plan demonstrates our commitment to the inherent dignity and the equal and inalienable rights of all members of the human family as the foundation of freedom, justice, and peace in the world. Our core goal of universal human dignity demands that we do all that we can to create true equity among all people.

We welcome you, our shareholders, friends, and questioning guests. We invite you to get to know us and to make our work better. And remember, with Domini even the smallest investment is part of something big, something important — working to build a better world.

Your values are talking. Domini is listening.

As a mutual fund manager, Domini is a shareholder — and proud 30-year-young influencer — of many companies. And if we’re one, so are you. Together, let’s grow communities, inspire companies, preserve the planet, and seek a world where shared prosperity is a way of life. As our shareholder, we hope you understand that your views impact ours. We want to hear from you and we’re listening.

Thank you for being part of our community.

Slowly, the numbers have proved me — and moved me. Last year, 33 percent of the $51.4 trillion in total U.S. assets under professional management were invested in sustainable, responsible, and impact investing strategies.* Today, many view impact investing as a growing trend. But for me, it will always be a proud tradition.”

Amy Domini

* US SIF Foundation. (2020, November 16). US SIF Report on US Sustainable and Impact Investing Trends 2020. Executive%20Summary.pdf.

The holdings discussed above can be found in the portfolio of the Domini Impact Equity Fund, Domini International Opportunities Fund, Domini Sustainable Solutions Fund, Domini Impact International Equity Fund and Domini Impact Bond Fund. The composition of each portfolio is subject to change.
The Domini Funds are not bank deposits and are not insured. Investment return, principal value, and yield will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. You may lose money. See the prospectus for more information on risks.

The Domini Impact Equity Fund is subject to certain risks including impact investing, portfolio management, information, market, recent events, and mid- to large-cap companies risks. The Domini Impact International Equity Fund is subject to certain risks including foreign investing, emerging markets, geographic focus, country, currency, impact investing, and portfolio management risks. The Domini Sustainable Solutions Fund is subject to certain risks including sustainable investing, portfolio management, information, market, recent events, and mid- to large-cap companies and small-cap companies risks. The Domini International Opportunities Fund is subject to certain risks including foreign investing, geographic focus, country, currency, impact investing, and portfolio management risks. Investing internationally involves special risks, such as currency fluctuations, social and economic instability, differing securities regulations and accounting standards, limited public information, possible changes in taxation, and periods of illiquidity. These risks may be heightened in connection with investments in emerging market countries.

The Domini Impact Bond Fund is subject to certain risks including impact investing, portfolio management, style risk, information, market, recent events, interest rate and credit risks. The value of your investment will fluctuate with changes in interest rates and could decline if an issuer’s credit rating falls, it goes bankrupt or it fails to pay, or otherwise defaults on payments of interest or principal. The Domini Impact Bond Fund currently holds a large percentage of its portfolio in mortgage-backed securities. During periods of falling interest rates, mortgage-backed securities may prepay the principal due, which may lower the Fund’s return by causing it to reinvest at lower interest rates. Some of the Domini Impact Bond Fund’s community development investments may be unrated and carry greater credit risks than its other investments. Potential risks related to the Bond Fund’s investments in derivatives include currency, leverage, liquidity, index, pricing and counterparty risk. TBA (To Be Announced) securities involve the risk that the security the Bond Fund buys will lose value prior to its delivery, that the security will not be issued, or the other party to the transaction will not meet its obligation, which can adversely affect the Fund’s returns. The reduction or withdrawal of historical financial market support activities by the U.S. Government and Federal Reserve, or other governments/central banks could negatively impact financial markets generally and increase market, liquidity and interest rate risks which could adversely affect the Fund’s returns.

The Adviser’s evaluation of environmental and social factors in its investment selections and the timing of the Subadviser’s implementation of the Adviser’s investment selections will affect the Fund’s exposure to certain issuers, industries, sectors, regions, and countries and may impact the relative financial performance of the Fund depending on whether such investments are in or out of favor. The value of your investment may decrease if the Adviser’s or Subadviser’s judgement about Fund investments does not produce the desired results. There is a risk that information used by the Adviser to evaluate environmental and social factors, may not be readily available or complete, which could negatively impact the Adviser’s ability to evaluate such factors and Fund performance. The market value of Fund investments will fluctuate and you may lose money.

There is a Public health crisis caused by the COVID-19 outbreak that may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The market prices of companies at different capitalization levels may vary due to market conditions and cycles. The value of your investment will be affected by the Fund’s exposure to mid-, large- and small-cap companies.

This report is not authorized for distribution to prospective investors of the Domini Funds referenced herein unless preceded or accompanied by a current prospectus for the relevant Fund.
Nothing herein is to be considered a recommendation concerning the merits of any noted company, or an offer of sale or solicitation of an offer to buy shares of any Fund or company referenced herein. Such offering is only made by prospectus, which includes details as to the offering price and other material information. Carefully consider the Funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ prospectus, which may be obtained by calling 1-800-582-6757 or at Engagement statistics are provided on a best effort basis.

DSIL Investment Services LLC (DSILD), Distributor, Member FINRA. Domini Impact Investments LLC (Domini) is the Funds’ investment manager. The Funds are subadvised by unaffiliated entities. 9/21

Check the background of DSIL Investment Services LLC and its investment professionals on FINRA's BrokerCheck. Before investing, consider the Domini Funds’ investment objectives, risks, charges, and expenses. View or order a prospectus. Read it carefully.

DSIL Investment Services LLC (DSILD) distributor, Member FINRA.

Domini Impact Investments LLC (Domini) is the Funds’ investment manager. The Funds are subadvised by unaffiliated entities.

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