Climate, Not Elections, Will Move Markets Soon, Says ESG Pioneer

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.