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Investment Screening

Most companies, like people, have a mix of strengths and opportunities for improvement. Companies’ mixed records can make it challenging for investors (and their managers) to determine whether they meet their social values, as well as their financial objectives.

A growing number of benchmarks, however, illustrate how values-based screens can be used to meet clients’ social and financial objectives. These include: the Dow Jones Sustainability Indices, the Calvert Social Index and the Domini Social Index.  All three have generated strong financial returns while meeting various social expectations.

The annual Business Ethics list of 100 Best Corporate Citizens provides another universe of companies widely recognized for aspects of their corporate citizenship. Reviewing the components of these benchmarks to see which companies are, or are not, included may provide some helpful background in implementing the social screens below.

While most information from activist websites and the Internet should be “taken with grains of salt,” the Multinational Monitor’s annual list of 10 “worst” corporations of the year can also alert portfolio managers to companies facing particularly high profile controversies and concerns among environmental, labor, and other social groups. Profiles by the Interfaith Center for Corporate Responsibility (ICCR), and other groups also report on recent controversies.

For many social investors, a pattern of controversies, and whether a company reacts defensively to a controversy or seeks proactive solutions, are more significant indicators of concern than one particular incident. For instance, certain companies such as ExxonMobil, Monsanto, and Wal-Mart face controversies on numerous fronts, and are excluded from most social investors’ portfolios.

UUA Screening Guidelines

The four categories of Unitarian Universalist Association (UUA) screening guidelines, community, environment, customer and employee, are based on our Purposes and Principles and UUA Resolutions and Actions of Immediate Witness.

For more information contact responsibleinvesting @ uua.org.

This work is made possible by the generosity of individual donors and congregations. Please consider making a donation today.

Last updated on Friday, June 17, 2011.

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