Calvert Social Index
The Calvert Social Index measures the performance of those companies that meet the social investment criteria selected from the universe of approximately the 1,000 largest U.S. companies, based on total market capitalization, included in the Dow Jones Total Market Index (the “Dow Jones TMI”). The Dow Jones TMI represents the top 95% of U.S. companies based on float-adjusted market capitalization, excluding the very smallest and least-liquid stocks. As of December 31, 2008, the capitalization range of the Calvert Social Index was $181 million to $184 billion, and the weighted average capitalization was $54.6 billion. The Fund seeks to have a weighted average capitalization that approximates that of the Index. As of December 31, 2008, there were 633 companies in the Index, though this number will change over time due to company mergers or changes due to Calvert’s evaluation of an issuer’s conduct relative to the Fund’s social criteria. The Index is reconstituted once a year based on an updated list of the 1,000 largest U.S. companies. The Index is also reviewed quarterly to adjust for social criteria and other factors.
Calvert Social Index Criteria
The Index seeks to include companies that:
- Demonstrate good environmental compliance and performance records, develop and market innovative products and services, and embrace and advance sustainable development.
- Provide safe and healthy work environments; negotiate fairly with their workers; treat their employees with dignity and respect; and provide opportunities for women, minorities, and others who have been discriminated against or denied equal opportunities.
- Uphold corporate responsibility abroad, as well as at home, by developing and observing appropriate human rights standards.
- Respect the rights of indigenous peoples and their territories, cultures, environment, and livelihood.
- Produce or market products and services that are safe and enhance the health or quality of life of consumers.
- Contribute to the quality of life in the communities where they operate, such as through corporate philanthropy and employee volunteerism.
- Exhibit sound corporate governance and business ethics policies and practices, including independent and diverse boards, independent auditors, respect for shareholder rights, and good legal and regulatory compliance records.
The Index seeks to avoid companies that:
- Are the subject of serious labor related actions by federal, state or local regulatory agencies.
- Have recent significant environmental fines or violations; are significantly responsible for environmental accidents; or own or operate nuclear power plants or have substantial contracts to supply key components in the nuclear power process.
- Have serious and persistent human rights problems or directly support governments that systematically deny human rights.
- Have a pattern and practice of violating the rights of indigenous peoples.
- Develop genetically-modified organisms for environmental release without countervailing social benefits such as demonstrating leadership in promoting safety, protection of indigenous rights, the interests of organic farmers and the interests of developing countries generally.
- Abuse animals, cause unnecessary suffering and death of animals, or whose operations involve the exploitation or mistreatment of animals.
- Manufacture tobacco products.
- Manufacture, design, or sell weapons or the critical components of weapons that violate international humanitarian law; or manufacture, design, or sell inherently offensive weapons, as defined by the Treaty on Conventional Armed Forces in Europe and the UN Register on Conventional Arms, or the munitions designed for use in such inherently offensive weapons.
- Manufacture or sell firearms and/or ammunition.
- Are significantly involved in the manufacture of alcoholic beverages.
- Have direct involvement in gambling operations.
- Have poor corporate governance or engage in harmful or unethical business practices.