Ethical Policy

The Negative Criteria - Identifying those companies to avoid

In identifying companies which have a harmful effect on the environment and its inhabitants, Standard Life's ethical funds look at company policies and practices in the following areas:

Environmental damage and pollution

Including:

Environmental pollution (UK only).
Companies convicted of a pollution offence under the Environmental Protection Act or the Radioactive Substances Act in the last 3 years covered are excluded.
Ozone-depleting chemicals.
Companies which manufacture or supply ozone-depleting chemicals.
Pesticide production.
Companies which manufacture pesticide products.
Tropical forests and sustainable timber.
Companies that clear tropical forests.
Airline companies will be excluded from the funds.

Tropical forests and sustainable timber

Companies that clear tropical forests without environmental mitigation measures in place will be excluded from the funds. The funds will also exclude companies that are involved in the production / use of high volumes of timber unless the company follows internationally recognised timber sourcing standards.

Test products on animals

The funds will avoid investment in companies which manufacture products or ingredients that have been tested on animals by themselves or their suppliers.

Genetic engineering

The funds will avoid investment in companies that carry out genetic engineering of crops, genetic engineering of animals or gene patenting.

Intensive farming

The funds will avoid investment in companies that use intensive farming methods and own or operate fish farms.

Fur

The funds will avoid investment in companies that sell fur products.

Operate in countries which violate the political and civil rights of their people, unless the company's policies address human rights.

Companies that operate in two or more countries which are rated poorly by Freedom House, an organisation based in the United States which monitors human rights worldwide, and The Observer Human Rights Index will be avoided, unless they have policies on human rights.

Pornography

Companies that derive more than 3% of turnover from publishing or distributing pornographic magazines or newspapers (UK only) or adult entertainment services are avoided.

Produce or sell weapons

Companies that produce or sell weapons, including nuclear weapons, will be avoided.

Process nuclear power

Under this criterion companies that own or operate nuclear power stations will be avoided.

Produce alcohol

The funds will avoid investment in companies which derive 10% or more of turnover from alcohol production.

Produce tobacco

The funds will avoid investment in companies that manufacture tobacco products.

Are involved in gambling

Companies which derive 10% or more in turnover from involvement in gambling will be avoided by the funds.

The Positive Criteria - Identifying those companies to invest in

In identifying companies which are regarded as having a positive effect on society and the environment, Standard Life's ethical funds look at whether companies:

Make a positive contribution to the environment

For example:

Publish an environmental policy or statements or produce an environmental report. Produce environmental technologies, for example, technologies associated with pollution control and conservation of natural resources. Develop or use renewable energy, for example, solar, wind and wave energy.

Promote sound employment practices

For example:

Good policies and practices on equal opportunities and diversity. Training and education - have an active approach to employees' training and development needs. Health and safety - provide clear evidence of health and safety systems or a good record on health and safety.

Promote products and services which benefit the environment or human life.

Companies that provide environmental products and services which are of benefit to the community or life-saving and life-enhancing products such as medicines and safety equipment.

Donate to charities or are strongly involved in the community

Companies which demonstrate clear evidence of commitment to community or charitable work, including employee secondment schemes or make gifts in kind to the community.

Have clear policies and procedures on bribery and corruption

Companies which instruct their employees not to support or permit any corrupt practices, such as bribery, in their work for the company.

Have a policy that encourages good principles of business behaviour and ethics

Companies which have adopted a code which encourages employees to follow principles of good business behaviour. This should be published and distributed to all employees and, ideally, to groups outside of the company.