Skip to Content
Market Update

Socially Responsible Funds Ponder the Microsoft Issue

Should socially responsible funds hang on to Microsoft in the wake of judge's findings?

Judge Thomas P. Jackson's findings against Microsoft (MSFT) present a difficult quandary for socially responsible funds--many of which have invested heavily in the software giant.

Socially responsible investors strive to shape companies into better corporate citizens. But according to Jackson, Microsoft's behavior has been anything but civil: "Through its conduct, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products."

"Microsoft is problematic," acknowledged Amy Domini, founder of the $1 billion Domini Social Equity Fund (DSEFX).

This is a hardly new issue for socially responsible funds, but Jackson's findings are forcing the social investment community to again face the question: What constitutes a socially responsible investment? If, as in the case of Microsoft, a company passes environmental and diversity screens, do social investors care if the company behaved in an anticompetitive manner?

For the full story on Microsoft and socially responsible funds
click here.