DEFINITION of 'Domini 400 Social Index'
A market cap weighted stock index of 400 publicly traded companies that have met certain standards of social and environmental excellence. Potential candidates for this index will have positive records on issues such as employee and human relations, product safety, environmental safety, and corporate governance. Companies engaged in the business of alcohol, tobacco, firearms, gambling, nuclear power and military weapons are automatically excluded.
This relatively new index was designed to help socially conscious investors weigh social and environmental factors in their investment choices.
BREAKING DOWN 'Domini 400 Social Index'
Socially conscious investing is a growing trend across many demographic and geographic areas, and having a social conscience may become a competitive advantage for corporations through their relationships with shareholders.
The index is independently maintained by research firm KLD Research & Analytics, and aims to be comprised of chiefly large cap stocks in the S&P 500; the ranges break down as follows:
1. Approximately 250 companies in the S&P 500
2. 100 companies not in the S&P 500, but providing sector diversification and exceeding pre-determined market cap limitations
3. 50 companies that have shown excellence in their social and environmental dealings