APPENDIX
ETHICAL INVESTMENT SCREENING BASED ON NEGATIVE SCREENING
| Animal testing | The testing of cosmetic finished products and ingredients on animals is no longer allowed in the United Kingdom, but continues abroad. Some consumers believe animal testing to be equally unacceptable in the production of other chemical products. |
| Community involvement | There are arguments in favor of identifying and encouraging companies that make a positive effort to contribute to the communities they work in and to society at large, whether via donations or other means. However, not all investors will necessarily share the same priorities as companies in choosing which causes to support. |
| Corporate governance | Corporate governance provides a framework for accountability to a company’s owners, its investors, and shareholders. Fundamentally, good corporate governance should facilitate good company performance, ensuring that it is managed in the best interests of its owners. |
| Disclosure | Investors, the public and government increasingly recognize the need for quality information on corporate policy and practice. For investors to be able to pick and choose between companies, it is essential they have sufficient information to make an informed decision. |
| Environmental improvement and management | Public concerns about the degradation of the environment are becoming increasingly widespread. Companies have responded to this in a variety of ways, with a number of initiatives and approaches being adopted. |
| Equal opportunities | Some companies may have improved their equal opportunity records by developing a system to monitor effectiveness of equal opportunity policies. |
| Genetic engineering | Genetic engineering and modern biotechnology are perceived by some to be an unacceptable way of manipulating nature. |
| Health & safety breaches | Investors can show their disapproval of companies that break the rules by avoiding investment in those that have been successfully prosecuted. |
| High environmental impact | Public concern about the degradation of the environment is becoming increasingly widespread. |
| Human rights | Investors have traditionally boycotted certain countries, but increasingly it is being argued that countries need investment to improve basic social and economic rights. Against this background, some people have concerns about the activities of certain companies. |
| Intensive farming | Many people are concerned about food quality, particularly food contamination, antibiotic residues, and the use of growth hormones and pesticides. |
| Military | Some people believe that the use of military force is unacceptable, either for defensive or offensive purposes |
| Nuclear power | The threat of radioactive contamination from an incident at a nuclear power station concerns many people. |
| Pesticides | Excessive pesticide use can lead to the buildup of chemical residues through the food chain, damage to birds and insects, injuries and deaths among farm workers, and damage to animal and human immune systems. Some chemicals are also ozone depleting. |
| Pollution convictions | There has been increasing concern in the last few years about the effects of environment pollution on health. A small number of prosecutions are carried out against companies every year as a result of noncompliance with a legally issued notice or following a serious pollution incident. |
| Pornography and adult films | Pornography is often objected to on the grounds that it may deprave, corrupt, and contribute to sexual violence and sex discrimination. There has been rising public concern about Internet pornography and worries about children using the Internet and accessing offensive material. |
| Positive products and services | Ethical Investment Research Services has identified five groups of activity that can be seen as providing basic necessities, environmental products, and other services that help in solving problems and making the world a safer place. The five groupings are: Environmental technology, including products such as machinery for recycling, wind power generators, and pollution abatement technology Waste disposal companies Public transport and bicycles, including provision of bus services and maintenance of railway tracks Safety and protection, such as alarm systems for elderly people living alone, fire alarms, life jackets, and protective clothing Health care, including medicines, hearing aids and glasses, housing, food, and clothing |
| Supply chain issues | The quality of working conditions in global supply chains is a high-profile issue of concern to many investors. Because many companies have yet to actively address some of these concerns, a helpful indicator of progress is the extent to which a company has developed policies to encourage, maintain, and improve working conditions in its supply chain. |
| Sustainable timber | Deforestation, including the clearance of land for agriculture, plantations, and developments, commercial logging, and the collection of fuel wood can have damaging effects on the environment and threaten the survival of certain wildlife. |
| Third world concerns | Many investors are concerned that too many companies put profits before principles in the dealings with the third world, and that by doing so they are actually contributing to the world’s poverty and its dependency on developed economies. |
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