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MSCI KLD 400 Social Index

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Unveiling the MSCI KLD 400 Social Index: A Guide to Socially Responsible Investing

Understanding the MSCI KLD 400 Social Index

The MSCI KLD 400 Social Index stands as a beacon in the realm of socially responsible investing, spotlighting companies that uphold exemplary environmental, social, and governance (ESG) standards. Originating in 1990 as the Domini 400 Social Index, it pays homage to Amy Domini, one of the pioneers behind KLD Research & Analytics, the entity involved in managing the index.

Insights into the MSCI KLD 400 Social Index

This stock index comprises 400 publicly-traded entities renowned for their high ESG ratings, making it an integral part of the toolkit for socially conscious investors. Companies considered for inclusion in the index must exhibit commendable practices across various domains, including employee welfare, product safety, environmental sustainability, and corporate governance. Notably, businesses engaged in industries such as alcohol, tobacco, gambling, and weapons technology are excluded from consideration.

Operational Mechanics of the MSCI KLD 400 Social Index

The index predominantly features large-cap stocks, necessitating candidates to be headquartered in the United States and listed on either the New York Stock Exchange (NYSE) or the Nasdaq exchange. Companies failing to meet the required ESG criteria risk being replaced by counterparts with superior ratings during the annual review conducted in April.

A Glimpse into the MSCI KLD 400 Social Index

As of December 1, 2020, the index showcased substantial investments in prominent American technology giants like Microsoft, Meta (formerly Facebook), and Alphabet. Microsoft, holding a significant share in the index, has consistently upheld stellar ESG ratings, earning it a top-tier "AAA" rating from MSCI since 2016.