Letters

Social Investing 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 implies that the field of socially responsible investing is suspect. 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. 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. We do not endorse companies, and we do not claim to invest in "socially responsible companies ." We act on behalf of socially responsible investors ---those individuals and institutional investors that are concerned about the social and environmental impact of corporations. 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. Harris portrays a pseudo-religion of John Mackey worship that we do not subscribe to. We try to do our best to measure and evaluate what corporations actually do—not what they claim to do. We are very aware of Mackey's antiunion stance, and we do not share his views. 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. On our Web site, we highlight this concern in our brief profile of the company. 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. .. . . .Virtually every single company in our portfolio has a mix of positive and negative characteristics. Whole Foods is no exception. We caution Dissent's readers to be extremely wary of any investment firm that tells them otherwise . We invest according to defined standards. Over the years, we have developed standards that we use to evaluate companies for our portfolios. 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. 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. 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. We don't punish success. 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. So long as growth and success have not been achieved through illegal or unethical means, we do not penalize large companies for their success. 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. As investors, however , we cannot help our shareholders meet their financial needs and also avoid companies that grow. Our investors would like to be part of the solution. They believe that they can effect more change by participating as investors than by standing on the sidelines. We don't ignore union and labor issues. Contrary to Harris's statement, we do not ignore union issues and the treatment of employees. The treatment of workers not only at U.S. plants but at overseas suppliers has been one of our key concerns. 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. 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. Similarly, Wal-Mart was removed from the Index in 2001. Whole Foods...