In this Issue:
Information powers transformation. That's why we’re excited to share this quarter’s impact highlights and insights. Filled with research and stories that move sustainability forward, we continue to demonstrate how impact investing is more than a trend; it’s our tradition.
We publish quarterly impact updates to keep shareholders informed on how their investments are making a difference.
Building Back Better
We started 2021 with a commitment to build back better. One year has passed since the beginning of the pandemic, further highlighting the important role of impact investors in the future of the health of our planet and our global community. As investors, we’re focused on resilience, in our social and environmental systems, as well as the markets and the companies in which we invest. This quarter, we highlight our work protecting and respecting all people’s human rights—to health and representation at work
Building Resilient Companies
The unprecedented disruption caused by the COVID-19 pandemic invites a rare opportunity for unprecedented change. Working with a group of large institutional investors, we have engaged nearly 50 companies to date to ascertain how they are building the resilience of their firms through this crisis. This quarter, we led engagements with Mirvac, an Australian property group, and Raia Drogasil, a Brazilian pharmacy chain, and participated in engagements with Thomson Reuters, Starbucks, Marriott International, and J Sainsbury. While climate change, biodiversity loss, and environmental health continue to be top of mind, these engagements recognize the critical role that workers, communities, and society writ large play in systemic resilience. We will continue to report on these long-term engagements.
Protecting Uyghur Human Rights
In March 2020, the Australian Strategic Policy Institute (ASPI) issued a groundbreaking report alleging the widespread use of forced labor of Uyghur peoples, a Turkic-speaking Muslim minority native to the northwest Xinjiang region, across China and especially in the northwestern Xinjiang region. The area is also responsible for providing approximately one-fifth of the world’s cotton, raising serious human rights risks for the apparel sector.2 Subsequent reporting confirmed the allegations and many Western countries have now issued or proposed sanctions and import bans on products.
We leveraged our role as investors to engage apparel brands and other companies implicated in the ASPI report. This quarter, we led or co-led engagements with adidas, Alstom, H&M, Li Ning, Microsoft, Nike and Panasonic, asking companies to respond to allegations by mapping their supply chain to identify potential connections to the region, to disengage from business relationships connected to forced labor in and from the Uyghur region, and to disclose efforts and progress.
Labor Rights at Amazon.com
During the first quarter, Amazon warehouse workers in Bessemer, Alabama voted on whether or not to join a union, marking perhaps one of the most important elections of U.S. workers in recent history. Initial counts show that the vote to unionize garnered 29% of the votes cast, though there are several challenges pending.3 During the process, we joined with over 70 other investors representing more than $7 trillion in assets under management to raise concerns about tactics deployed by the company surrounding the unionization vote. While the company has stated its commitment to human rights and the ILO Core Conventions — both of which include freedom of association — many reports detailed practices that fell short of fully respecting those rights. We will continue our longstanding work to engage with the company on these and related issues.
Equitable Access to Health
As part of our ongoing work with the Access to Medicine Foundation, we joined more than 150 other investors representing more than $14 trillion in assets under management in calling for an effective, fair and equitable global response to COVID-19. The Access to COVID-19 Tools (ACT) Accelerator was launched in April 2020 as a global collaboration designed to leverage existing global public health infrastructure and expertise to accelerate the development, production, and equitable access to COVID-19 tests, treatments, and vaccines. In our statement, we raised serious concerns about the impact that limited funding for the ACT Accelerator and uneven global access to health technologies will have on the trajectory of the pandemic and global economic activity in the coming years. COVAX, the vaccine specific pillar of the ACT Accelerator, aims to distribute two billion doses to the world’s poorer countries by the end of this year.4 As a signatory, we also collectively committed to engaging with healthcare companies to promote bolder industry action in support of access.
The pandemic has highlighted a higher correlation of COVID-19 related mortalities in nursing homes, which have accounted for more than 40% of all reported deaths across 22 countries.5
A recent study showed that the presence of a health care worker union in a U.S. nursing home facility was associated with a 30 percent relative decrease in the COVID-19 mortality rate.6 This quarter, we joined over 90 other investors representing over $3 trillion in assets in publicly expressing our expectations of the nursing home sector, which include improved practices related to staffing, workplace health and safety, wages and contracts, freedom of association and quality of care.
And Much More
Forests & Finance
As part of our ongoing work on forests, we held calls with 13 financial companies in our portfolios and received written responses from two more. These dialogues are helping to identifying best practices and industry leaders while also identifying criteria for which companies need to improve practices.
We were proud to speak on Clubhouse with The Solutions Journal and Palm Done Right, an international campaign showing that palm can be grown for good. Sourcing palm oil is one of the greatest threats to tropical forests but using regenerative agriculture for the crop can help restore landscapes and ecosystems.7
Tax Credits for Clean Energy
The use of tax credits and incentives have provided essential support for the rapid development and deployment of clean energy solutions. We joined investors representing over $30 billion in assets in writing to the various committees of jurisdiction in the U.S. Congress urging them to extend these vital policies through 2030.
Public Policy for Sustainable Markets
We joined an investor letter led by the US SIF: The Forum for Sustainable and Responsible Investment to support sustainable investing and sustainable financial markets through a set of policy recommendations for the new administration in U.S. government. 8
Our Standards & the Sustainable Development Goals
The way our food is grown affects our health, the health of the economic wellbeing of farmers throughout the world, and the future of our planet’s food security. Organic, low-input, small-scale agriculture is also an important consideration in the fight against climate change. Because of the significant and far-reaching impacts that our food decisions have, we seek to invest in companies that promote organic and non-GMO foods and that support local farming and sustainable agriculture. Below, we highlight companies that are helping to pave the way toward a sustainable food future.
Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture
Domini Impact Equity Fund Investment Highlight
Beyond Meat, headquartered in El Segundo, California, is at the forefront of the plant-based meat revolution. The company is one of the first to develop plant-based meat that is designed to mimic the taste and texture of animal-based meat. It continues to innovate and expand its portfolio with products like plant-based ground beef and sausage using ingredients like pea, mung bean and rice proteins, cocoa butter, and beet juice extract, which contain no GMOs, soy, or gluten. The company has potential to help address several major sustainability challenges by shifting diets from animal-based to plant-based proteins, including human health, climate change, natural resource constraints, and animal welfare.
Domini Sustainable Solutions Fund
SunOpta Inc, headquartered in Mississauga, Canada, is a vertically integrated leading supplier of organic and non-GMO farm produce, food, and ingredients that goes from field to table. The company works with the Organic Trade Association to improve the integrity of organic products while promoting organic farming globally to reduce the negative impacts on ecological systems such as air, soil, and water. As of 2020, organic products represented 50% of revenue and non-GMO certified products represented 20%.
Domini International Opportunities Fund
Oisix Ra Daichi Inc, headquartered in Tokyo, Japan, engages in the electronic commerce and home delivery business. Its products include online grocery of organic and natural foods, fruits and vegetables, and processed food. In 2018, the company acquired Radish Boya, which focused on the home delivery of organic vegetables. Between April 2019 and March 2020, the company shipped approximately 15,000 tons of organic and low-pesticide vegetables to its 340,000 subscribers.
Domini Impact International Equity Fund Investment Highlight
Carrefour SA, headquartered in Boulogne-Billancourt, France, engages in the provision of supermarkets and retail stores. The company considers themselves the leader in the organic retail market in France through its offerings of over 1,000 own-branded organic products. In 2019, the company’s sales from organic products reached over $2.7 billion. The company has also partnered with several banks to create the first investment structure dedicated to food transition in Europe. The funds are intended to develop suppliers' conversion to organic farming and to promote animal welfare. In 2019, the company signed more than 540 organic conversion support contracts with and worked with 1,776 organic farmers in France.
Domini Impact Bond Fund Investment Highlight
The Domini impact Bond Fund is invested in a bond issued by The Nature Conservancy, a District of Columbia nonprofit public charity, whose mission is to conserve the lands and waters on which all life depends. The Conservancy focuses on healthy oceans, lands and freshwater, and climate change adaptation and mitigation and pursues global solutions through hundreds of carefully planned, localized projects. Since its inception, the Conservancy has protected more than 125 million acres of land and currently operates more than 100 marine conservation projects throughout the world.
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1. https://s3-ap-southeast-2.amaz... 2. https://scceu.org/cbp-and-dhs-...; See also: https://www.bbc.co.uk/news/ext... 3. https://www.nytimes.com/2021/0... 4. https://www.gavi.org/news/medi... 5. https://ltccovid.org/2021/02/0... 6. https://www.healthaffairs.org/... 7. https://thesolutionsjournal.co... 8. https://www.ussif.org/Files/Pu...