What is the Calvert Social Index?
Calvert, a leader in socially responsible investing, has created the Calvert Social IndexTM, as a broad-based, rigorously constructed benchmark for measuring the performance of US-based socially responsible companies.
How is the Calvert Social Index constructed?
Calvert starts by taking the 1,000 largest companies in the US, represented by stocks listed on the NYSE and NASDAQ and AMEX (not including closed-end mutual funds, ADRs, REITS and non-common shares). Calvert's Social Research Department then analyzes each company. A social audit is conducted in the following areas:
Products
Are the company's products safe, useful and beneficial? We don't invest in companies that produce firearms, tobacco, alcohol, pornography, casino games or military weaponry.
Environment
Is the company in compliance with government regulations? Is it working to reduce its impact on the environment?
Workplace
How does the company rate on labor relations? Does it treat employees fairly, offer reasonable benefits, and provide a safe workplace?
Integrity
Does the company have good community relations? If it's a bank, does it provide credit without discriminating against people in its service area? If it's a natural resources extractor, do they deal fairly with indigenous people? Companies with overseas operations are included as well, like the many footwear and apparel manufacturers.
The stocks that meet Calvert's social criteria make up the Calvert Social Index.
What are the sector weightings of the Index?
As of September 13, 2006
|
ECONOMIC SECTORS |
% |
|
Energy |
1.90 |
|
Materials |
1.20 |
|
Industrials |
6.50 |
|
Consumer Discretionary |
11.00 |
|
Consumer Staples |
6.85 |
|
Health Care |
14.32 |
|
Financials |
27.30 |
|
Information Technology |
26.23 |
|
Telecomm Service |
3.84 |
|
Utilities |
0.88 |
How is the Index maintained?
Calvert reconstitutes the Index once a year in September based on an updated list of the 1,000 largest companies as of the 3d Friday in June. Calvert will also review the economic sector weightings and consider limiting the largest weighting to a pre-established level. To accomplish this, the weightings of individual Index components will be modified. A quarterly review will also be conducted to reflect share adjustments, modify Index components due to changes in social criteria, and to review sector weightings. The Index will be reviewed regularly to reflect corporate actions such as mergers and acquisitions.
What is the median market capitalization of the Index?
The capitalization of the companies in the Index will change due to market movements. As of September 15, 2006, the average weighted market cap is approximately $11.49 billion.
How is the value of the Index calculated?
Calvert Social Index is a market capitalization-weighted Index. This type of index measures the changes in the market value of the index components as a whole. On the inception date (April 28, 2000), the Calvert Social Index's base value was set to 100. The value of the Index is updated every business day.
How many companies are in the Index?
As of September 15, 2006, there are 641 companies in the Index. However, this number may change over time because of company mergers or changes due to social criteria.
What is Calvert's social screening process?
Calvert's Social Research Department analyzes each company with its proprietary social research methodology, using:
In-house files on almost 7,000 companies. We gather information using the Lexis®-Nexis® database, the world's largest news and business information service. We also subscribe to hundreds of specialty publications, ranging from industry publications to social responsibility reports.
Conversations with company management. We want to know what challenges they face and what (if any) innovative programs they have that contribute to best practices within their industry.
Data from US environmental and social regulatory agencies. For example, our analysts can directly link to the Environmental Protection Agency's databases and review a company's environmental performance by factory.
Discussions with advocacy organizations such as environmental groups, consumer groups, labor unions, and human rights organizations. While we don't always agree with their viewpoints, being involved in these communities can provide a lot of critical information.
Index companies must meet Calvert's criteria in the following areas:
- Governance and ethics
- Environment
- Workplace
- Product safety and impact
- Community relations
- International operations and human rights
- Indigenous Peoples' rights
Why would a stock be added to or removed from the Index?
There are three reasons:
- Annual reconstitution
- The stock may disappear from the universe due to a corporate event such as a merger or acquisition
- The issuing company may now or no longer meet our social screening standards
