Exclusions & Ethical
Sparinvest has over a decade of experience in screening funds and applying exclusionary filters
Full Policy on Exclusions and Ethical Fund Criteria
Universal Exclusions
We believe that ESG integration and stewardship are powerful tools, allowing investors to maintain diversified portfolios while considering ESG issues. In our active funds, this is one of the factors that can lead our teams to select or reject potential investments. Across our funds, we also work with companies to encourage stronger governance and sustainability.
However, we set a clear baseline for exclusions. None of our strategies will invest in:
- Controversial weapons: confirmed producers or distributors of controversial weapons. This means anti-personnel mines, cluster munitions, biological weapons, chemical weapons, depleted uranium, and nuclear weapons outside the Nuclear Non-Proliferation Treaty.
- Excluded countries: State issued securities and state-owned entities that fail to pass our country screening process.
- Persistent norm violators: fail to remedy norm violations and are unresponsive to engagement
- Extreme transition laggards: thermal coal/oil sands companies with poor transition management
To see Sparinvest’s list of excluded companies, click here
Ethical Funds & Tailored Solutions
To provide our clients with greater choice, we also offer a range of Ethical funds. These funds go further, and exclude companies based on violations of international norms and involvement in certain sectors.
Norms-based
We exclude companies based on violations of international norms for human rights, labour relations, the environment, and anti-corruption.
The underlying norms stem from frameworks such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, ILO conventions, and OECD guidelines.
Sector-based
Based on revenue exposure, we have zero tolerance for production
and max 5% tolerance distribution, of:
*zero tolerance of production or distribution of combat weapons; 5% tolerance for production or distribution of other military equipment
Climate-based
Climate change is perhaps the single most significant ESG issue and naturally, this is reflected in our integration of ESG considerations into our investment processes and stewardship efforts.
In our Ethical range of funds, our climate-related exclusionary criteria are based on consultation with clients in the different funds regarding their preferred balance between stewardship and exclusion of companies that are lagging in their response to the climate emergency. Our funds use combinations of the following exclusion categories:
**Exposure is typically assessed on the basis of revenue or production thresholds. To read more about how individual funds apply these exclusionary criteria, see Sparinvest Exclusions and Ethical Fund Criteria To see Sparinvest’s list of excluded companies, click here
Tailored Solutions
We can also tailor segregated solutions for clients who wish to establish more specific exclusionary criteria. Implementation of these exclusionary screens is carried out in partnership with external ESG service providers.