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.
Positive Criteria: Companies We Favor
Public Sustainability Reporting & Disclosure
Global Reporting Initiative standards, CDP questionnaires, diversity profile disclosure
Beneficial Products & Services
Energy and water efficiency, renewable energy, healthy lifestyles, sustainable agriculture, high-quality goods, or economic justice
Environmental Stewardship
Climate change policies, renewable energy use, water conservation, waste minimization, strong compliance and management
Diversity, Equity, and Inclusion
Comprehensive policies, programs and practices promoting a diverse workforce, demonstrated achievements in advancing women and People of Color in management
Community Commitment
Community benefits agreements, charitable giving, supplier diversity, facilities in blighted areas
Employee Well-Being & Safety
Occupational safety, strong benefits and employment practices, inclusive employment policies, equality for LGBTQIA+ employees
Global Responsibility & Best Practices
Workers' rights, fair labor practices, best global practices, nondiscrimination
Strong Governance & Management
Fair executive compensation, regulatory compliance, diverse leadership, strong board oversight
Exclusionary Screens
We exclude companies materially involved in the following areas:
Fossil Fuels
Extraction, exploration, production, refining; electric power generation primarily from fossil or nuclear fuels
Weapons
Conventional, chemical, biological or nuclear weapons production; manufacture or sale of firearms for civilian use; autonomous lethal weapons systems
Tobacco
Tobacco products and e-cigarettes
Fur Production
Production of products containing animal fur
Animal Testing
Beyond legal requirements without governance policies
Factory Farming
Conventional industrial-scale animal farming
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
Prison Industrial Complex
Business practices supporting or profiting from incarceration systems
GMOs
Use in seed production
Production of pornography
In addition to the above specific screens, we annually review and restrict companies with significant controversies or involvement in areas that are harder to define. For example, we perform diligence to understand companies’ potential involvement in:
- Human rights violations, including in supply chains
- Causation of negative environmental or social impacts in communities of color
- A pattern of discrimination or indications of a workplace culture that tolerates harassment or discrimination.
- Providing strategic economic support to repressive regimes
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, along with fundamental financial due diligence.
1. Evaluation
Negative Screens: Ensure companies do not engage in listed harmful activities described above.
Positive Screens: Assess whether companies actively contribute to social and environmental benefits.
2. Reporting
Direct Company Engagement: Reach out to companies for additional information when necessary.
Sustainability Research Report: Compilation of findings, reviewed by the Research Team.
3. Approval
Investment Committee Review: Fully integrated financial and sustainability report is presented to the Investment Committee for final approval.
4. Monitoring
Annual Review and Ad Hoc Monitoring: Comprehensive yearly reviews ensure ongoing compliance of all approved companies, paired with ongoing monitoring of emerging issues as needed when issues arise.
5. Removal
Engagement and Removal: Companies no longer meeting our criteria may be removed from our Buy List after thorough review and documented rationale and potentially engagement to address the issue.
