Sustainability Criteria & Integration
Our commitment to responsible investing is reflected in our meticulous approach to selecting securities that align with our environmental and social standards. Our comprehensive process, from initial evaluation to ongoing monitoring and potential removal of investments, ensures our clients' portfolios are both ethically sound and financially robust.
Sustainability and Screening Criteria
Our environmental and social criteria are designed to identify companies that contribute positively to society and the environment. We apply exclusionary screens to avoid companies that engage in harmful activities.
We positively view companies excelling in areas such as:
Public ESG Reporting & Disclosure
Global Reporting Initiative standards, CDP questionnaires, diversity profile disclosure
Beneficial Products & Services
Energy efficiency, renewable energy, healthcare, sustainable agriculture, high-quality goods, strong safety record
Environmental Stewardship
Climate change policies, renewable energy use, water conservation, waste minimization, strong compliance and management
Diversity, Equity, and Inclusion (DEI)
Comprehensive policies promoting DEI, products and services designed to serve or benefit people of color
Community Commitment
Community benefits agreements, charitable giving, supplier diversity, facilities in blighted areas
Employee Well-Being & Safety
Occupational safety, inclusive employment policies, diversity and equality for LGBT employees
Global Responsibility & Best Practices
Workers' rights, fair labor practices, best global practices, fair tax, nondiscrimination
Strong Governance & Management
Fair executive compensation, regulatory compliance, diverse leadership, strong board oversight
Exclusionary Screens
We exclude companies materially involved in:
Fossil Fuels
Fossil fuel extraction, exploration, production, and refining; electric power primarily from coal, oil, or nuclear fuels
Fracking
Hydraulic fracturing (fracking) of oil and gas shale
Weapons
Conventional or nuclear weapons production; manufacture or sale of firearms for civilian use
Tobacco
Tobacco, tobacco products, and e-cigarettes
Fur Production
Animal testing beyond legal requirements
Animal Testing
Animal testing beyond legal requirements
Factory Farming
Industrial-scale animal farming practices
Gambling
Gaming equipment manufacturing or casino operations
Payday Lending
Short-term, high-interest loans targeting vulnerable populations
For-Profit Degree Programs
Educational institutions prioritizing profit over educational outcomes
Environmental Injustice
Activities causing disproportionate environmental harm to communities of color
Culture of Discrimination
Evidence of systemic discrimination or tolerance of harassment in the workplace
Prison Industrial Complex
Business practices supporting or profiting from the incarceration system
Repressive Regimes
Supporting repressive regimes (e.g., Burma and Sudan)
GMOs
Use of GMOs in seed production
Problematic Surveillance
Activities related to invasive or unethical surveillance practices
Sustainability Criteria & Screening Process
At Clean Yield, the integration of sustainability criteria into our investment decisions is a rigorous and multi-faceted process. Each new security considered for our buy list undergoes thorough scrutiny, combining insights from third-party research providers, NGOs, databases, and news sources.
1. Evaluation
Negative Screens: We start by ensuring the company does not engage in activities listed under our negative screens.
Positive Screens: If the company passes the negative screens, we then assess it against our positive screens to ensure it actively makes social and environmental contributions to society.
2. Reporting
Direct Company Engagement: Where necessary, we reach out to companies for additional information to complete our evaluation.
Sustainability Research Report: We compile salient findings into a sustainability research report that is reviewed by our Research Team.
3. Approval
Investment Committee Review: If the Research Team deems the investment promising and aligned with our criteria, the report is integrated into the full investment report that is presented to the Investment Committee for final approval.
4. Monitoring
Annual Review and Adhoc Monitoring: Each year, we conduct a comprehensive review of companies on our Buy List to ensure continued compliance with our social and environmental criteria and identify potential risks. We also remain vigilant throughout the year to spot any emerging issues
5. Removal
Engagement and Removal: If a company no longer meets our criteria, we engage with the company to address the issues. If the company fails to improve, we may remove it from our Buy List after a thorough review and documented rationale.