Social Investing
Domini, Amy
Editors In his article "Welcome to Whole-Mart"' (Winter 2006), Mark T. Harris presents a detailed challenge to Whole Foods's image as a pure, socially responsible company. By extension, he...
...We don't punish success...
...We exist to meet their needs and to use their dollars to help transform the companies we hold, and, in a broader sense, capitalism itself...
...On our Web site, we highlight this concern in our brief profile of the company...
...We have filed numerous shareholder resolutions asking companies to ensure that their code of conduct for suppliers recognizes the right to form unions and bargain collectively...
...We do not endorse companies, and we do not claim to invest in "socially responsible companies...
...Our investors would like to be part of the solution...
...So long as growth and success have not been achieved through illegal or unethical means, we do not penalize large companies for their success...
...Contrary to Harris's statement, we do not ignore union issues and the treatment of employees...
...Harris portrays a pseudo-religion of John Mackey worship that we do not subscribe to...
...If the standards were set to exclude every publicly traded company with a problem, we would have nothing left to invest in, and would not be able to meet our investors' financial goals...
...AMY DOMINI New York, N.Y...
...The treatment of workers not only at U.S...
...By extension, he implies that the field of socially responsible investing is suspect...
...Virtually every single company in our portfolio has a mix of positive and negative characteristics...
...We helped to lead a coalition of investors that convinced Procter & Gamble to start selling Fair Trade Certified coffee...
...As investors, however, we cannot help our shareholders meet their financial needs and also avoid companies that grow...
...We have also helped channel tens of millions of dollars into community development financial institutions around the country, revitalizing both urban and rural communities...
...We share Harris's concerns about the seemingly unchecked growth of corporations and believe that our society needs to have a very critical discussion about these issues...
...We are very aware of Mackey's antiunion stance, and we do not share his views...
...If you are investing in large-cap stocks, then, by definition, the companies you hold have been successful enough to grow large, and in some cases to drive their competitors out of business...
...We believe that selecting securities is only one of three important aspects of social investing, which also includes shareholder advocacy and community investing...
...The fact that we do establish social and environmental standards, however, sends a strong message to corporations and has helped create a global dialogue about the nature of corporate citizenship...
...Similarly, Wal-Mart was removed from the Index in 2001...
...Whole Foods's anti-union activities are explicitly cited as a concern in the profile prepared by KLD, which maintains the Domini 400 Social Index...
...We act on behalf of socially responsible investors--those individuals and institutional investors that are concerned about the social and environmental impact of corporations...
...Many discussions of social investing assume that it is only, or primarily, about identifying and investing in companies with DISSENT / Spring 2006 n 109 LETTERS better social and environmental records...
...We do invest in Whole Foods and recently profiled the company in our annual report to shareholders, along with other companies in our portfolio that provide healthy or organic food...
...KLD Research & Analytics dropped Nike from the Domini 400 Social Index over sweatshop issues in 1999, and only recently reinstated the company after it agreed to disclose the names and addresses of all of its active supplier factories on its Web site...
...We believe that investors can be one of the most effective transformative forces in society, and we are dedicated to providing the tools to empower investors to work towards a society, in Harris's words, that is "guided in its essentials by human needs, not corporate profits...
...We try to do our best to measure and evaluate what corporations actually do—not what they claim to do...
...We are working with a number of leading companies on improving working conditions in their global supply chains...
...We caution Dissent's readers to be extremely wary of any investment firm that tells them otherwise...
...We don't ignore union and labor issues...
...We do this by setting clear social and environmental standards to guide our investment decisions and then by using our leverage as shareholders to engage companies directly...
...plants but at overseas suppliers has been one of our key concerns...
...We invest according to defined standards...
...They believe that they can effect more change by participating as investors than by standing on the sidelines...
...These standards, which reflect the traditional concerns of social investors, include community relations, corporate governance, diversity, employee relations, the environment, human rights, and product safety and usefulness...
...We do not believe it is our role to defend Whole Foods, but we would like to make a few points very clear about socially responsible investing, as practiced by Domini Social Investments...
...Whole Foods is no exception...
...In fact, we wrote to him several years ago to alert him to very serious concerns raised by the United Food and Commercial Workers and shared by Domini...
...Over the years, we have developed standards that we use to evaluate companies for our portfolios...
...We want our investors to understand that we are not invested in perfect companies and that as investors we must make very difficult decisions every day...
...Picking companies isn't the whole story...
...We helped to convince JPMorgan Chase to hire its first director of environmental affairs and to launch a comprehensive set of environmental policies...
...Social investing does make a difference in the world, and most social investors recognize that its importance goes beyond any litmus test involving a single company or a single social or environmental issue...
Vol. 53 • April 2006 • No. 2
