Methodology
Index Construction
The CV400's core universe is the S&P 500, covering over 80% of the U.S. equity market.
Based on KLD’s Domini 400 Social Index (DS400), the CV400 has an additional layer of screens covering abortion, contraceptive products and embryonic/fetal stem cells. The CV400 holds companies that have positive environmental, social, governance and Catholic values performance relative to their industry and sector peers, and in relation to the broader market. KLD selects companies for the CV400 that are in accordance with the United States Conference of Catholic Bishops' Socially Responsible Investment Guidelines (USCCB SRI Guidelines). KLD evaluates each company’s Catholic values performance covering the following areas:
| Catholic Values Performance |
| Respecting Human Life |
Promoting Human Dignity |
| Reducing Arms Production |
Pursuing Economic Justice |
| Protecting the Environment |
Encouraging Corporate Responsibility |
Companies involved in the following specific business activities that violate the USCCB SRI Guidelines are disqualified from the CV400:
| Disqualification Activities |
| Direct participation in or support of abortion |
Derive greater than 5% of revenues from the production of military weapons or firearms |
| Use embryonic stem cell or fetal tissue for research or in a product |
Significant revenues from the sale or distribution of pornography are disqualified. |
| Manufacture contraceptive products |
Manufacture of anti-personnel landmines |
| Production of tobacco products |
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Companies with involvement in nuclear power production are generally disqualified; however, those with minimal involvement in nuclear power and with notable involvement in the area of alternative energy may be considered. Companies involved in the manufacture or sale of alcohol or those involved in the gambling industry are evaluated on a case-by-cases basis. In addition, companies with a pattern of racial or gender discrimination, labor rights or predatory lending controversies that have not taken steps to address these concerns are disqualified from the index.
The CV400 strives to include companies with strong performance in the areas of Catholic values outlined in the USCCB SRI Guidelines including:
| Positive Catholic Values Performance |
| Provide access to health care and pharmaceuticals |
Corporate policies on equal pay/promotion opportunities for women and minorities |
| Avoid the use of sweatshops in the manufacture of goods |
Provide affordable housing or lending for such housing |
| Adequate worker safety guidelines |
Provide generous wage and benefit policies |
| Programs and policies to protect the common environment |
Report on social and environmental performance, corporate citizenship or sustainability |
| Corporate Social Responsibility (CSR) guidelines |
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Index Maintenance
The Index Committee maintains the CV400 at 400 companies at all times, adding a company at the same time that another is removed. Companies may be removed from the CV400 due to corporate actions, violations of disqualification screens or poor social or environmental performance. KLD endeavors to keep turnover on the Index at a rate consistent with turnover on the S&P 500.
For Information on KLD Catholic Values 400 Index Analytics, Licensing and Redistribution contact Indexes@kld.com.
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