Environmental And Social Screens
(as of May 2023)
Clean Yield screens out all companies* materially involved in the following areas:
- Fossil fuel extraction, exploration, production, and refining
- Production of electric power generated primarily by coal, oil, or nuclear fuels
- Hydraulic fracturing (fracking) of oil and gas shale
- Deriving more than 5% of revenues from conventional or nuclear weapons and their support systems
- Deriving any portion of their revenues from chemical or biological weapons, cluster bombs and landmines
- Deriving any portion of revenues from the manufacture or sale of firearms for civilian use
- Animal testing, beyond legal requirements*
- Fur production
- Abuse of animals for entertainment
- Factory farming
- Manufacture of gaming equipment or operation of casinos
- Tobacco, tobacco products, and e-cigarettes
- Use of genetically modified organisms (GMOs) in seed production
- Business activities that provide strategic economic support to repressive regimes (e.g., Burma and Sudan)
*Corporate disclosure on animal testing tends to be very poor. As such, we will adhere to this screen as faithfully as possible.
We view these factors positively when judging the suitability of each company:
- Public reporting on ESG performance, especially in accordance with the Global Reporting Initiative
- Completion of the CDP carbon and water questionnaires
- Public disclosure of lobbying and political expenditures and agendas, trade‐association memberships, and charitable donations
- Disclosure of workforce diversity profile, especially the EEO-1 form
- Beneficial products or services, such as energy efficiency, water conservation, pollution control, renewable energy, healthcare, healthy lifestyles, or sustainable agriculture
- High‐quality goods or services with fair pricing
- Positive product safety record
- Focus on products and services providing solutions to environmental challenges
- Strong policies and practices to address climate change, such as greenhouse gas emissions reduction targets, or the use of renewable energy
- Strong water conservation policies and practices
- Sound environmental compliance record
- Participation in multi-stakeholder initiatives designed to develop and promote the uptake of best environmental practices
- Policies and practices designed to minimize environmental footprint, such as source reduction, waste minimization, reuse/recycling programs, and use of renewable energy
- Strong environmental management systems, such as the use of independent audits and linkage of management compensation to the fulfillment of environmental objectives
- Participation in Community Benefits Agreements or other tangible commitments to materially strengthening host communities’ economic, social and environmental well-being
- Location of facilities in blighted areas or former brownfields
- Community‐directed charitable giving above industry average
- Strong supplier diversity programs
- Favorable occupational safety and health record
- Neutrality toward labor organizing
- Enlightened employment policies, such as generous retirement benefits, employee stock‐ownership plans, same‐sex domestic-partner benefits, on‐site child care, liberal parental leave, and charitable match programs
- Express policies and practices ensuring full equality for lesbian, gay, bisexual, and transgender (LGBT) employees
- Strong affirmative action programs and demonstrated achievements in advancing women and people of color in management
- Respect for workers’ freedom to organize and freedom of association
- Consistent application of best environmental, labor, and human rights practices globally, even where local or national laws are less stringent
- Paying a fair share of taxes to both host countries and country of incorporation
- Commitment to free, prior, and informed consent when conducting business on indigenous land, following the UN Declaration on the Rights of Indigenous Peoples
- Policies to discourage child labor or other grossly exploitative labor practices in manufacturing or sourcing of products
- Independent third party auditing of supply chains for fair labor practices in emerging countries
- For pharmaceutical industry: demonstrated commitment to making products affordable and available in developing countries, particularly for pandemic diseases
- Global application of nondiscriminatory policies for LGBT employees
- Appropriate levels of executive compensation
- No poison pills, golden parachutes, or other management entrenchment devices
- No patterns of regulatory infractions
- Limited use of auditing firms to perform consulting work
- Proportional representation of women and minorities on the board and top management
- CEO and board chairperson positions not filled concurrently by same individual
- Strong board oversight of ESG policies and performance
* Some Clean Yield client portfolios transferred to our management include securities that do not meet our screens. Taxes and other considerations may cause us to retain these “legacy” securities. On occasion, clients may direct the purchase of securities that are not part of Clean Yield’s buy list and may not meet Clean Yield’s environmental and social screening criteria. We may use the client’s position as a basis to enter into dialogue with companies or introduce shareholder resolutions on the client’s behalf.
Clean Yield’s Racial Equity Criteria
(approved 9/9/2021)
To underscore its commitment to racial equity and justice, Clean Yield developed racial equity and justice investment criteria in 2021. The new criteria expands on and formalizes Clean Yield’s longstanding commitment to equity and inclusion and is integral to Clean Yield’s investment decision making and setting engagement priorities.
Positive Screens
Clean Yield favors companies that exhibit the following in relation to racial equity and justice:
- A strong policy commitment to diversity, equity, and inclusion (DEI).
- Board oversight of DEI
- Disclosure of comprehensive workforce diversity data including hiring, promotion, and retention data by gender, race and ethnicity.
- A link between CEO compensation and diversity performance
- Staff dedicated to workplace DEI
- Disclosure of DEI goals
- Products and services that serve or benefit people of color
Negative Screens
Clean Yield avoids investing in companies with material involvement in the following areas:
- Payday lending
- For-profit degree programs
- Negative environmental impacts in communities of color
- A pattern of discrimination or indications of a workplace culture that tolerates harassment or discrimination.
- Involvement in problematic surveillance
- Involvement with the prison industrial complex
Engagement
Clean Yield withholds votes from or votes against slates of directors at US-based companies that lack racial or ethnic minorities on board. Clean Yield aims to engage with portfolio companies that lack racial or ethnic diversity on board to encourage increased board diversity. Further, Clean Yield may engage with companies regarding the positive criteria included above.