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RI interview: Amy Domini on Obama, SRI returns and clipping hedge funds
After a decade ‘out-of-kilter’, Domini believes SRI strategies are in tune with the new US regime.
Amy Domini has several reasons to welcome the arrival of Barack Obama as US President. The first is that besides being the first black President, Obama, she says, is also the first true ‘green’ leader of the US: “He comes from a much more experienced environmental background than any recent US Presidents. He’s got hands-on experience in areas of environmental advocacy such as the cleaning up of asbestos in buildings.” The second reason, she says, is that his ascent to the White House should bring socially oriented investment styles into favour in the US after a relatively poor decade so far due to it being “totally out-of-kilter”, she says, with the economics of the Bush era. Domini is one of the highest profile SRI figures stateside: a founder of Kinder, Lydenberg, Domini (KLD), the US research company in which she no longer has an interest, and the founder and chief executive officer of Domini Social Investments, the US SRI mutual fund company. The Domini 400 Social Index, owned by KLD, which Domini helped create and establish, took SRI investing into the mainstream in the US with a track-record that regularly outperformed the S&P500 and made Domini a spokeswoman for SRI issues.
In 2001, she published a well-received book: ‘Socially responsible investing, making a difference and making money’. Domini currently serves as a private trustee/portfolio manager for high net worth individuals at the Boston-based family office of Loring, Wolcott & Coolidge. She says US politics over the last eight years has created a top down economic environment in which certain industry sectors such as oil have dominated: anathema to the socially oriented investor. The future, however, she believes offers a bottom up picture, which will be more advantageous. “The US has had a period of stagnation on SRI, and this difficult time has meant that we’ve underperformed benchmarks. I think that will change. Congress was previously hostile to anything that was perceived to be responsible because it was deemed to be anti-competititive. The 2000-2008 stock market rally was really very narrow. If you look at the rise in oil stocks, the story was that it was about big demand in China, but really it was about the lack of regulation in commodity trading, and a succession of wars that contributed hugely. In the natural resources and extraction sectors, the Environmental Protection Agency
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