Fund Complex: Domini Funds
Management Company: Domini Impact Investments LLC; sub-adviser: Wellington Management Company LLP
Funds Affected: Domini Impact Bond Fund
Sustainable Investing Strategy: Values-based investing; Negative screening (exclusions), Impact investing, ESG Integration, Shareholder/Bondholder engagement and proxy voting
Domini believes that by factoring social and environmental sustainability standards into their investment decisions, investors can encourage greater issuer accountability. Domini’s social and environmental standards are incorporated into its investment process. Domini’s investment process also seeks to identify investments that may provide access to capital, creation of public goods and filling capital gaps left by current financial practices. Domini’s interpretation and application of its social and environmental standards are subjective and may evolve over time.
Domini evaluates potential corporate debt instruments against its social and environmental standards based on the businesses in which an issuer engages, as well as on the quality of the issuer’s relations with key stakeholders, including communities, customers, ecosystems, employees, investors, and suppliers.
With respect to noncorporate debt instruments Domini’s standards seek to identify issuers, asset classes or individual securities that, among other things, play a positive role with respect to community development or otherwise generate positive social, environmental or community impact across multiple themes, particularly when serving historically underserved communities. In general, Domini seeks to identify those debt instruments that build strong communities, and in particular those that support affordable housing, education, climate mitigation, small business development, community revitalization, rural development, the environment, and healthcare.
At its discretion, Domini may invest a portion of the fund’s portfolio in mortgages, loans or pools of loans issued by community development banks, credit unions, non-profit community development organizations, government agencies or instrumentalities and government-sponsored entities. In addition it may place deposits or make loans with such organizations, or community loan funds or make investments in, other debt or equity instruments issued by these or similar organizations that seek a positive social or environmental impact. Such investments are not subject to the sub-adviser’s proprietary analytical tools. These investments may not be insured by the FDIC and may earn below-market rates of return. Some of these investments may be in unrated or lower-rated securities that carry a higher degree of risk than the fund’s investment-grade securities. Some of these investments may be illiquid and are subject to the fund’s limit on illiquid securities (which is 15% of the Fund’s net assets).
There are certain lines of business that Domini believes are fundamentally misaligned with its goals of universal human dignity and ecological sustainability. The following exclusionary screens are applied across all funds: Weapons and firearms, Nuclear, oil, natural gas, coal mining, tobacco, alcohol and gambling.