For 'Dharma Indexes,' Firms' Conduct Matters

Dow Jones has launched "dharma indexes" to track the stocks of companies that observe the values of dharma-based religions such as Hinduism and Buddhism.

The Dow Jones Dharma Indexes are the first to measure dharma-compliant stocks and now track more than 3,400 companies globally, including about 1,000 in the United States, according to the company. In addition to the global index, Dow Jones has created dharma indexes for the United States, Britain, Japan and India.

Dharma Investments, a private faith-based Indian firm, partnered with Dow Jones to create the indexes.

"The principle of dharma contains precepts relevant to good conduct, but also the implicit requirement of mindfulness about the sources of wealth -- and therefore responsible investing," said Dharma Investments chief executive Nitesh Gor.

Advisory committees of religious leaders and scholars will screen and monitor companies' policies on the environment, corporate governance, labor relations and human rights, among other criteria. Companies from business sectors deemed un-dharmic, such as weapons manufacturing, pharmaceuticals, casinos and alcohol, are barred from the index.

Bhakti Charu Swami of the International Society for Krishna Consciousness said, "If one only considers the profit motive of an investment without recognizing how that profit was generated, one may unknowingly commit sinful activity. Every link in the entire chain of events is liable for the results."

Dow Jones says it pioneered faith-based indexes in 1999 with the Islamic Market Indexes, which monitor companies' compliance with sharia law. The company has no plans for a Christian index, said Dow Jones spokeswoman Naomi Kim.

Socially responsible investing now encompasses about 10 percent of the $24 trillion U.S. investment marketplace, according to the Washington-based Social Investment Forum.