At Domini Impact Investments, we take a comprehensive approach to the promotion of environmental sustainability through our mutual funds. Our concerns span industries and sustainability issues. We are not just alternative energy or ‘clean tech’ investors, although these are certainly part of our investment considerations. Our approach recognizes that all industries face environmental challenges to one degree or another.
Our investment process is guided by our Global Investment Standards, which provide a framework for our research. Our environmental standards focus on five primary areas:
- Renewable and alternative energy sources;
- eco-efficiency and resource conservation;
- recycling, safer technologies, and lifecycle design;
- pollution control and abatement; and
- long-term environmental sustainability.
We believe that companies that address the long-term environmental challenges of their industries will benefit the environment and their shareholders by increasing efficiencies and reducing potential liabilities and conflicts with communities.
Environmental challenges play out in dramatically different ways across industries. For most industries, identifying “best practices” in sustainability is our preferred approach. For these industries, we favor those companies that are making the greatest progress in addressing their industry-specific challenges.
For a limited number of industries, we believe that even best practices are inadequate to address intractable environmental issues. We therefore exclude these industries from our fund portfolios entirely. For example, we exclude substantial owners of active nuclear power plants due to concerns over safety and radioactive waste storage, and we exclude companies that are substantial owners and producers of oil or natural gas reserves and are included in the Integrated Oil & Gas or Oil & Gas Exploration & Production Industries as defined by the Global Industry Classification System (GICS), as well as companies significantly involved in coal mining due to financial, environmental and moral concerns associated with fossil fuels' contribution to climate change. We also avoid investment in major producers of synthetic pesticides and agricultural chemicals.