The Domini Social Index 400 is a market capitalization weighted index that tracks the performance of companies that meet a wide range of social and environmental standards.
For instance, the index screens out companies that manufacture or promote alcohol, tobacco, gambling, weapons, and nuclear power. It includes others that have outstanding records of social responsibility.
About half the stocks included in the Standard & Poor's 500-stock Index (S&P 500), on which the Domini Index is modeled, make the cut, including giants like Microsoft and Coca-Cola. The other stocks are selected based on the industries they represent and their reputations for socially conscious business practices.
The index is considered a benchmark for measuring the effect that selecting socially responsible stocks has on a financial portfolio's performance. This practice may also be called social screening.
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