Amy Domini says listening to her clients led her to become a pioneer in environmental, social, and governance investing. Before founding Domini Impact Investments LLC, which now manages $2.3 billion in assets, the Cambridge, Mass., native was a stockbroker in the Boston area in the 1970s and ’80s. She learned then that a lot of investors had strong views on what they would—and wouldn’t—invest in. That led Domini to recognize the power of mission-driven investing, and soon she was pushing for divestment from South Africa, which was under apartheid rule at the time. In 1990 she created one of the first social indexes of U.S. companies based on ESG criteria, and later that decade she started her company based on similar sustainable principles.
Domini’s oldest fund, the Domini Impact Equity Fund, has had a mixed performance since its 1991 inception. In December 2018, Domini and her company’s chief executive officer, Carole Laible, started managing the fund in-house. (During the previous 12 years it had been overseen by another asset manager that had used a quantitative model.) The fund has since had a lot more success. From Dec. 1, 2018, through Sept. 30, 2020, it returned a cumulative 40%, vs. a 26.3% gain from its benchmark, the S&P 500 index.
Domini, 70, spoke with Bloomberg News’s Saijel Kishan in August about her career, the ESG industry, the coronavirus, and why she thinks this “crazy market” is going to wake up soon.
Saijel Kishan: What motivated you to get involved in responsible investing?
Amy Domini: So many things are serendipitous, and with me that was the case. I wasn’t particularly interested in school. My friend and I both took a typing class, and we didn’t land a job at first, but I was able to get one [eventually] as a photocopy clerk. From there, I worked my way up in that company to a stockbroker. I started that job [at Tucker Anthony & R.L. Day] in 1975, shortly after the Vietnam War had begun to wind down. People would say, “Don’t talk to me about weapons.” One time it was a birdwatcher, head of the Massachusetts Audubon Society, and she said about a paper company I recommended, “You’ve gotta be kidding me. They spray the trees with dioxin, which causes leaves to drop and kills everything.” She was just furious with me for even suggesting she might want to own a paper company.
As a stockbroker, it’s really hard to get clients. The last thing in the world you want to do is anger them. I needed to know these people better. And I just started asking them a few questions, like “Is there anything you don’t want to invest in?” And I’d put down some suggestions like weapons and other things that people had objected to. They all wanted to express their own personal morality. And I thought, “Oh, this is just incredible. Everyone feels that there are lines they want to draw.”
SK: There are so many terms to describe responsible investing. What should we use?
AD: I was content using the word “ethical.” I was fine with “socially responsible.” I can deal with “ESG.” I can deal with “impact,” but do I have to use them all? What happens is that every time a new firm is started, they want to say that they’re the next step, that they’ve gone further, and they come up with some new names. I think it’s just confusing. Could we just agree on vocabulary?
SK: What have been the lowlights and the highlights of the past six months for you?
AD: A cleaner atmosphere, at least before all the forest fires started. Right now, my 94-year-old mother is with me. She’s been staying for a couple of months. She’s perfectly independent. On the other hand, I have grandchildren whom I haven’t been able to hug in five months.