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November 15, 2001
The Socratic Method Expands
by William Baue
KLD expands the scope of SOCRATES, its database of research reports on issues related to the social
and environmental performance of thousands of companies.
SocialFunds.com --
On November 5, 2001, KLD Research & Analytics,
Inc. (KLD) announced a major expansion of the number of companies it reports on through
SOCRATES, its interactive database containing thoroughly-researched profiles of companies’
social responsibility. Also known as the Corporate Social Ratings Monitor, SOCRATES originally
covered companies listed on the S&P 500 Index and the Domini Social Index (DSI) 400. The expansion
quadruples the number of companies covered to include the entire Russell 3000 Index as well as
KLD’s own Broad Market Social Index (BMSI.)
 “This is a major breakthrough for the
growing ranks of investment professionals who want a ‘one stop’ resource on social and
environmental data on every major publicly traded corporation in America,” said KLD Research
& Analytics President Peter Kinder. “The enlargement of KLD’s universe of profiled
companies reflects our commitment to providing SOCRATES subscribers the most comprehensive and
timely social research available on corporations.”
SOCRATES formats information in
easy-to-read narratives written by a team of 18 research analysts. Each analyst follows predefined
companies while also specializing in specific issues and certain sectors, creating a triangular net
for catching breaking news. Analysts update profiles on a daily basis, as new and pertinent
information becomes available.
SOCRATES divides its profiles into six categories based on
the following social rating criteria: community involvement, diversity, employee relations,
environmental practices, non-US operations, and product quality and safety. For example, the
sample profile of the Merck Company posted on KLD’s website notes under the “Family
Benefits Strength” heading that “In 1999 Working Mother magazine included Merck
on its list of the 100 best workplaces for working mothers.”
SOCRATES includes
exclusionary screening in six areas: alcohol, firearms, gambling, military contracting, nuclear
power, and tobacco. Additionally, clients can request an “involvement report” on a
specific issue. For example, Catholic investors can query on contraceptives to identify “any
publicly traded company [indexed by SOCRATES] that is involved in the development or manufacture of
contraceptives or abortifacients, as well as companies that own or operate acute care hospitals or
surgical centers,” according to KLD Director of Media and Communications Anjali Gupta.
Clients can combine multiple queries to search the SOCRATES database, allowing them to pinpoint
specific variables of interest to them. They can also browse the database by keyword.
The SOCRATES expansion marks the continuing growth of KLD’s family of investment
indicators and tools: the company introduced the Domini 400, the first socially responsible
investing index, in 1990; in December 2000, it added the BMSI, which indexes approximately 2,300
socially-responsible companies on the Russell 3000; and in May 2001, KLD introduced the Large Cap
Social Index (LCSI), an index of 700 companies screened from the Russell 1000 Index. Future plans
include continued collaboration with the Russell/Mellon Analytical Services, including
the addition of a screened Russell 2000 Index.
©
SRI World Group, Inc. All Rights Reserved.
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