the sustainable, responsible and ethical investment information hub
Brief description of Style
Funds with ‘Limited Exclusion’ strategies exclude a small number of companies as a result of their published ethical or ESG strategy.
They may for example, have one or two areas of ‘ethical’ exclusion, such as ‘Avoid tobacco companies’ or ‘Avoid companies involved in the manufacture of cluster munitions’.
Alternatively, they may exclude for example the worst 20% of companies (across all sectors) when assessed against a named ESG rating methodology. The aim of strategies of this kind is typically to reduce ESG (environmental, social and governance) related risks for investors.
These exclusions may be the fund’s core ‘ESG’ strategy – or the management company may be more focused on stewardship (engagement) activity which requires them to have access to contraversial companies in order to encourage necessary and beneficial changes.
Impact on investment strategy
These exclusions tend to have a relatively minor impact on where a fund can invest – meaning that they may appear to be ‘unscreened’ funds.
Who is this Style most likely to appeal to?
This SRI Style is most likely to suit clients who want to avoid only the industry the fund excludes – or companies that are widely agreed to be ESG laggards.
This style may also appeal to people who want to encourage the transition to more sustainable practices but users should check the ‘Responsible Ownership’ fields on Fund EcoMarket to see if individual funds are active in this way as strategies vary.
The SRI Services & Partners annual Good Money Week event will be back, in person, on 6 October 2022 Sign up here As in previous years there will be a combination of expert keynote presentations and fund manager panel sessions. The main details are: Date: Thursday 6 October Main conference: 10 – 5.30pm Drinks reception: […]
Below is a link to an article that I wrote for this month’s Investment Life and Pension Moneyfacts. (Just published – July 2022) My title for the piece was “Sustainable investment: slow, slow, quick” in recognition of the accelerating pace of change in all things sustainable investment, particularly climate change. Their title ‘Putting down roots’ […]
The journey to SDR and how it should help financial advisers