Standard Life Investments

How we evaluate companies

The guidelines we use

We expect companies to meet internationally recognised standards or industry best practice standards, whichever are higher.

We've produced guidelines on responsible investment to explain how we evaluate the environmental and social policies of the companies in which we are (or might be) an investor.

In general, we expect companies to meet internationally recognised standards or industry best practice standards, whichever are higher. We also expect them to report to shareholders on the policies and practices they have in place for addressing the responsibilities listed below. We use guidelines, such as the UN Global Compact to guide the evaluation of corporate behaviour.

Environmental responsibility

It's generally accepted that companies are responsible for the impacts of their operations and products on the environment. The steps they take to assess and reduce those impacts can lead to cost savings. We expect that companies will:

  • comply with all environmental laws and regulations
  • identify, manage, and reduce their environmental impacts.

Employee relations

Companies that respect internationally recognised labour rights and provide safe and healthy working environments for employees are likely to reap the benefits, along with a more committed and productive workforce.

We expect that companies will:

  • comply with all employment laws and regulations
  • take affirmative steps to ensure that they uphold good labour standards
  • adopt health and safety policies and programmes to ensure the implementation of such policies
  • adopt equal employment opportunities policies and a programme for ensuring compliance with such policies
  • adopt policies and programmes for employee training and development
  • adopt initiatives to attract and retain talented employees, foster higher productivity and quality, and encourage in their workforce a commitment to achieving the company’s mission.

Human rights and international operations

Companies that operate in, or source their goods from countries with a record of human rights abuse risk the safety of their staff and operations. They also expose themselves to the possible risk of action by consumers and non-governmental organisations, who oppose commercial activities as an opportunity for oppressive regimes to exploit.

We expect that companies operating in or sourcing goods from such countries will:

  • take affirmative steps to ensure that they do not violate internationally recognised standards on human rights and do not benefit from or use the products of others that do
  • adopt human rights policy guidelines for employees, contractors and suppliers if they are operating in countries that have been rated poorly on civil and political liberties by internationally recognised authorities.

Business ethics

As institutions of wealth and influence, companies have a significant impact on the prosperity of their local communities and the wider world. At the same time, a company’s failure to conform to internationally recognised standards of business ethics on matters such as bribery and corruption can impact its reputation and image, both of which influence its competitiveness. We expect companies to adopt and implement policies and practices in an effort to achieve best practice in relation to the impact on the communities in which they operate and business ethics.