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Our ethical criteria
Our ethical funds have strict negative criteria, so that if a company’s involved in any of the activities on the list below, we won’t invest in it.
However, you can be reassured that a company that passes our positive criteria will still be excluded if it fails the negative ones. We never offset one against the other.
The negative criteria - identifying those companies to avoid
In identifying companies that have a harmful effect on the environment and its inhabitants, our ethical funds look at company policies and practices in the following areas.
Environmental damage and pollution, including:
- companies that do not adequately address climate change
- environmental pollution (UK only)
- companies convicted of a pollution offence under the Environmental Protection Act or the Radioactive Substances Act in the last three years covered are excluded
- companies that manufacture or supply ozone-depleting chemicals
- companies that manufacture pesticide products
- chemical manufacturers that are not addressing issues of chemical safety and sustainability
- airline companies are excluded from our funds
- companies that are involved in the production/use of high volumes of timber unless the company follows internationally recognised timber sourcing standards
- companies involved in the extraction, processing, use or retail of timber from High Conservation Value forests.
Marketing breast milk substitutes
The funds will avoid companies that market breast milk substitutes but do not commit to adopting the Code of Marketing Breast Milk Substitutes.
Testing products on animals
The funds will not invest in companies that manufacture products or ingredients that have been tested on animals, either by the companies themselves or their suppliers.
We will not invest in companies that carry out genetic engineering of crops, genetic engineering of animals or gene patenting.
The funds will avoid investment in companies that use intensive farming methods and own or operate fish farms.
Our funds will not invest in companies that sell fur products.
Companies that operate in countries that violate the political and civil rights of their people, unless the companies’ policies address human rights
We will avoid companies that operate in two or more countries rated poorly by Freedom House, an organisation based in the United States that monitors human rights worldwide, and The Observer Human Rights Index, unless the companies have policies on human rights.
Companies that derive more than 3% of turnover from publishing or distributing pornographic magazines or newspapers (UK only) or adult entertainment services are avoided.
Production or sale of weapons
We will exclude companies that produce or sell weapons, including nuclear weapons.
Processing of nuclear power
Under this criterion companies that own or operate nuclear power stations will be avoided.
Our funds will not invest in companies that derive 10% or more of their turnover from alcohol production.
The funds will avoid investment in companies that manufacture tobacco products.
Involvement in gambling
We will exclude companies that derive 10% or more in turnover from involvement in gambling.
The positive criteria - identifying those companies to invest in
We also use positive screening, where we favour companies that are involved in activities that benefit the environment or society, such as developing renewable technology or providing good employee training and development opportunities.
In identifying companies that are regarded as having a positive effect on society and the environment, our ethical funds look at whether companies:
Make a positive contribution to the environment
For example, if they publish an environmental policy or statement or produce an environmental report. If they produce environmental technologies, technologies associated with pollution control and conservation of natural resources. Or if they develop or use renewable energy, for instance, solar, wind and wave energy.
Promote sound employment practices
For example, if they have good policies and practices on equal opportunities and diversity. Or have a positive policy on training and education, with an active approach to employees' training and development needs. In terms of health and safety, they may provide clear evidence of health and safety systems or a good track record on health and safety issues.
Promote products and services that benefit the environment or human life
Companies that provide environmental products and services 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 that 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 that 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 that 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.