The Boston Globe

The Domini Social Equity fund, one of the nation's
most closely watched socially and environmentally
screened index funds, celebrated its 10th anniversary
last week with parties in Cambridge and New York. Amy
Domini, president of the fund and author of a new
book, "Socially Responsible Investing: Making a
Difference and Making Money," talked with Globe
personal finance reporter Dolores Kong.
Q. How would you describe the changes in socially
responsible investing in the 10 years since the Domini
Social Equity fund was founded?

A. People forget that 10 years ago the majority still
didn't have the vote in South Africa. It's one of the
major shifts that has taken place with socially
responsible investing. Nelson Mandela did credit the
United States for being the single largest tool for
bringing that government to the negotiations table . .
. . Tobacco divestment has become much more front and
center . . . . Sweatshops are now the number one or
number two issue for my shareholders . . . . It's the
environment or sweatshops.
Q. What do you see for the future of socially
responsible investing? More shareholder activism?
Proxy votes?
A. There's been a huge growth in the socially
responsible mutual funds. We get into dialogue with
about 30 companies a year and file resolutions with
about 15 . . . . So the proxy voting area and activism
is an area that social investing is entering into
Q. In looking back, any disappointments in companies
that you've invested in?
A. Maybe I could talk about Wal-Mart. Ten years ago,
it was considered a pretty strong socially responsible
company. It was making a lot of low-level employees
quite well-to-do with its employee stock option plan.
They had a buy-USA campaign, which had been effective
in keeping jobs in the United States that really kind
of worked. They had their buy environmentally sound
packaging program, and that really did get companies
to package in recycled, corrugated cardboard. . . .
But the big problem is the company began to get more
and more noticed for its bullying practices, moving
into communities that basically didn't appear to want
them there . . . . The straw that broke the camel's
back for us was the sweatshop issue . . . . Wal-Mart
was just not willing to meet on the issue . . . . We
had been in them for 10 years, but this year, in
February, we dropped them. We felt we had to drop
Q. What do you think about the debate over whether you
can make money through socially responsible investing?

A. The debate has certainly subsided a great deal. I'd
like to think that the Domini Social Index had a bit
to do with that. I'd also like to have the debate come
about, that really hasn't come about yet: What is the
cost of not taking social criteria into account in
investing decisions? If shareholders make money off of
selling tobacco, and taxpayers pay money for the
health and other costs of tobacco, what we're really
doing is having the US taxpayers paying shareholders
in Philip Morris. What we're really talking about is
not making money. It's a cash transfer.