The Fund’s Ethical Investment Positions cover a wide range of issues. In arriving at these positions we strived to take into account the fullness of scriptural revelation as well as varying views within the Christian community. We recognise that many of these issues are subjective, and welcome member feedback and comments.
Abortifacient & abortifacient-like contraceptives
Christian Super affirms the belief in life from conception i.e. when a sperm fertilises an egg to become a zygote, and will seek to exclude companies involved in the service of abortion or drugs intended to induce abortion. These include:
- All abortion pills (e.g. RU486) and other medications designed to induce abortion
- All intrauterine devices (IUDs), such as copper IUDs or levonorgestrel (LNG) IUDs that deliberately prevent implantation
- All oral contraceptives (including emergency contraceptives) that are known to prevent or specifically claim to prevent implantation
Christian Super recognises the scientific ambiguity around the effects of oral contraceptives that are intended to prevent ovulation or fertilisation but are not intended to prevent implantation, and considers this a matter for Christian conscience.
Alcohol, while permissible, has significant negative impact on the community in general. Therefore Christian Super will avoid in its investments any company that derives more than 5% of its revenue from alcohol production or 10% of its revenue from distribution.
The Fund will further attempt to enhance its screening capabilities so that companies that are involved in responsible marketing of alcohol will not be excluded. Likewise the Fund will avoid investment into companies that are below the 10% distribution limit but have irresponsible sales practices.
Christian Super recognises the value of animals as part of God’s creation, and the responsibility to care for them. While animals play an important role in providing for humans, Christian Super will exclude companies who exploit animals in ways that are unnecessary or cruel.
Bribery & Corruption
Christian Super will exclude companies where:
- There is proof or our research indicates high likelihood of involvement in bribery or corruption; and
- Denial of wrong-doing is continuing and/or tangible commitment to taking appropriate preventative action is minimal.
To be considered for re-inclusion, a company must demonstrate over a reasonable period of time a commitment to development of appropriate policies and practices to prevent future corruption occurrences. This may include admission of guilt, removal of involved personnel, improvement of policy and co-operation with law enforcement authorities.
We recognise the sometimes subjective nature of bribery and will attempt to engage with companies where we see improvement could be made.
Due to the complex nature of poverty and child labour Christian Super will seek to engage with companies where issues arise to encourage transparency and improved practices as a step towards abolishing child labour. If a company is found to be wilfully ignoring their responsibilities (as defined by international organisations such as UNICEF and the International Labour Organisation) to address child labour in their supply chain, Christian Super will exclude them.
Christian Super should seek to adopt an approach that cares for the current generation as well as generations to come. Ideally, this will involve investment in areas that reduce human impact on climate change, underweighting companies that are involved in activities that negatively contribute to climate change and overweighting companies that are involved in activities that will reduce the effects of climate change.
Christian Super will avoid in its investments companies where there is proof or our research indicates high likelihood of involvement in predatory lending practices and who deliberately and unconscionably exploit the poor and those who are unable to repay loans. Companies that are involved in other unethical credit practices (e.g. misleading/misinforming borrowers on contract details and hidden costs, targeting youth with credit cards, regular offers of increased credit limits etc) will be under-weighted in our portfolio or excluded in extreme cases.
Christian Super will engage with debt issuers where possible to encourage responsible lending practices, with a willingness to exclude companies that are not responsive to such engagement.
Christian Super (where possible in collaboration with other groups) will advocate with the government to encourage responsible lending and the implementation of a strong consumer credit code.
Christian Super will encourage responsible use of debt among its members and the wider community.
While permissible, Fast Food companies are often involved in improper marketing of their product, particularly to young children. Christian Super will avoid, where possible, investing in companies that derive more than 10% of revenue from sale of unhealthy fast food products, where either the company’s business model is reliant on replacing healthy with unhealthy meals or the company uses irresponsible marketing practices (e.g. aimed at young children or at uninformed people in emerging markets).
Christian Super will exclude companies deriving more than 20% of their revenue from the following activities:
- Mining thermal coal
- Exploration and development of oil sands
- Liquefaction of coal
- Exploration and development of oil shale (not to be confused with shale oil or shale gas)
- Brown coal (or lignite) fired power generation
The primary principle underlying this exclusion is the desire to exclude companies involved in activities associated with the highest greenhouse gas emission intensity. The Fund will continue to monitor and revise this position to ensure that the types of activities and fossil fuels covered by the summary position keep pace with technological and environmental developments. When cleaner fuel sources and methods of energy production emerge, the position will be adjusted accordingly. At the same time the Fund will also review the 20% revenue threshold, to ensure appropriateness, with a view to reducing it towards 10%.
Due to gambling’s disproportionate effect on the poor and weaker members of society, as well as its propensity to encourage greed, Christian Super will avoid investing in companies involved in gambling. Without mitigating our view on the seriousness of the problem of gambling, we recognise that to an extent gambling falls under individual choice and thus we will apply a 5% of revenue tolerance level.
Christian Super recognises the potential benefits of genetic engineering (e.g. improving health and wellbeing, providing better outcomes in the agriculture sector). We also recognise that, as with any frontier technology, there are known and unknown moral risks that should be considered. We will exclude companies on a case-by-case basis where they:
- Fail to be transparent about their genetic engineering activities,
- Have no or inadequate systems in place to address moral risk, and/or
- Cause undue harm, particularly by causing disadvantage to those in need
- Create undue dependence on their products (eg agricultural terminator genes)
Given the apparent lack of compliance by the government of Côte d’Ivoire with the UN Sanctions, the Fund considers that any company operating in the country is in substantial danger. Additionally, given the importation of arms to private security firms, it is likely that companies with substantial operations in Côte d’Ivoire are employing security firms in violation of UN Sanctions. Companies will be assessed on a case by case basis for potential exclusion.
Democratic Republic of Congo
Given the internal conflicts involving armed rebel groups which commit regular human rights abuses, there is a risk of directly or indirectly supporting these groups. Therefore the Fund has rated this country as being at a level two severity. Companies will be assessed on a case by case basis for potential exclusion.
In line with tight UN sanctions and concerns of the international community, companies with operations in Iran will be excluded if they cannot demonstrate that they:
a) Do not have a direct business relationship with the Government or a project related to the Government;
b) Provide significant benefit to the local community; and
c) Have substantial corporate governance policies and practices relating to their operations within Iran
Given that US led military operations have concluded the Fund considers that many of the ethical concerns regarding Iraq no longer apply. However companies having operations in Iraq still face an unstable political and security context. Companies will be assessed for exclusion on a case by case basis. Companies that have previously profited from the US military action still bear the moral responsibility of their actions and will remain excluded until they can demonstrate policies and practices are in place to prevent similar ethical failures from occurring.
Given the complex situation around human rights in Israel, the Fund considers that any company operating in Israel is exposed to a range of risks, including the risk of being involved in breaches of UN decisions. The Fund will therefore seek further information on any company with operations in Israel.
Given the recent human rights abuses and the current unstable political situation, the Fund considers that any company operating in the country is exposed to security risk and possible breach of UN arms embargo if it hires a private security firm. The Fund will therefore seek further information on any company with operations in Libya.
Due to recent political developments in Myanmar the momentum in favour of increased freedom should be cautiously encouraged by relaxing the Fund’s stance in line with the international community. However companies that have previously profited from the suppressive government still bear the moral responsibility of their support for the junta and will remain excluded until the company can demonstrate it has policies and practices in place to prevent similar ethical failures from occurring. Companies operating in Myanmar will be excluded if:
a) They have a direct business relationship with the Government or a project related to the Government;
b) They do not provide significant benefit to the local community; or
c) They do not have substantial corporate governance policies and practices relating to their operations within Myanmar.
Given the closed and anti-capitalist nature of DPR Korea, it is unlikely that any company in which the Fund invests would have any involvement with anything relating to the sanctions enforced. Nevertheless in the unlikely case that a company is found to have business activities in the country or with the government, that company will be excluded.
Given the severity of the internal conflict and lack of stable government there are significant ethical risks associated with business operations in the country. Companies will be considered for exclusion on a case by case basis.
The Fund sees strong ethical issues with companies involved in operations in Sudan, given the ongoing government complicity in human rights abuses. Concentrated Sudan Divestment campaigns have gained significant traction. Although South Sudan has now gained independence there are still severe human rights abuses carried out with the support of the Sudanese government. Companies with operations in Sudan will be excluded if they cannot demonstrate that they:
a) Do not have a direct business relationship with the Government or a project related to the Government;
b) Provide significant benefit to the local community; and
c) Have substantial corporate governance policies and practices relating to their operations within the country in question.
Given the human rights abuses by the government of Syria, the Fund considers that any company operating in the country is in greater than acceptable levels of financial and human resource risk. Companies will be considered for exclusion on a case by case basis.
Due to the complex legal status of the territory it is difficult for nations to decide upon appropriate action. The Fund will engage with any company operating in Western Sahara and assess companies for exclusion on a case by case basis.
The Fund views the economic mismanagement and sporadic political violence as not being materially different from other African nations. There are no concerns about government suppression of minorities. Companies will be considered for exclusion on a case-by-case basis.
The Fund will move to assess companies where we see violations of God’s model for human work. This will involve assessing companies on their approach to a number of labour issues including safety, anti-union or anti-employer behaviour, work/life balance, discrimination and wage issues. Where our research process shows poor performance in these areas the Fund will underweight them in our portfolio and in extreme cases look to exclude the company.
On the positive side Christian Super will seek to invest in companies that have demonstrated strong labour practices, including commitment to a good work/life balance, excellent safety records, employment programs for marginalised groups and family-friendly policies.
Christian Super will exclude from investment any company involved in improper marketing that does not attempt to rectify this when engaged with. In addition, Christian Super will aim to avoid in its own marketing the “Seven Sins” of marketing, and will instead use the principles of integrity, honesty, sincerity, mutual respect and mutual benefit as it markets itself.
Christian Super views microfinance as a tool to alleviate poverty since it helps to stimulate the productivity of the poor allowing them to care for themselves and their families.
Christian Super may contribute to alleviating poverty in developing countries by investing in the microfinance sector, where such investment is consistent with investment risk and return objectives.
Christian Super will only invest in microfinance organisations that have processes in place to ensure that the poor are protected from over-indebtedness, usury and other exploitation.
In recognising the social and relational harm of the sex industry, Christian Super will exclude from investment any company found to be involved in the production or development of inappropriate adult products. The Fund will also apply a 5% of revenue exclusion on the distribution of adult products.
Christian Super will exclude any company involved in stem cell research that involves the destruction of human embryos. Where possible, Christian Super will encourage investment in research using adult stem cells.
In recognising the detrimental health effects of tobacco and its highly addictive nature, Christian Super will exclude on an involvement basis, investments in any company that manufactures or distributes consumable tobacco products (e.g. cigarettes and cigars). The Fund will apply a revenue tolerance of 2% for production and 10% for distribution.
Uranium is a potentially viable source of energy, particularly given the difficulties surrounding coal and oil. However Christian Super sees it as a suboptimal solution when compared to more renewable and safer alternatives and the potential risks are becoming increasingly obvious. Therefore we will exclude companies involved in uranium mining if they have no or unsatisfactory uranium export policies or are found to be exporting material amounts of uranium to states that have not signed the Non-Proliferation Treaty (NPT) on nuclear weapons. Further, we will carefully watch owners and operators of nuclear power plants and exclude on an ad-hoc basis where such companies lack appropriate policies and safety procedures or are involved in questionable activities.
Companies producing or involved with uranium enrichment or nuclear weapons are addressed in the Fund’s policy on investment in weapons.
Christian Super will seek to avoid investing in companies that are showing poor waste stewardship practices, and invest more heavily in those with a demonstrated commitment to whole of product cycle waste management.
Christian Super recognises the increasing spread and intensity of water scarcity globally, and will seek to exclude companies found harshly monopolizing water resources to the exclusion of others and destroying people’s ability to access water for their own use.
Christian Super will also seek investment in technologies, and overweight companies involved in technologies, promoting the fair, affordably priced and sustainable availability of water.
Military Weapons and Firearms
Christian Super will avoid in its investments companies that derive more than 5% of revenues from the manufacture of military weapons and small firearms. In addition, companies that derive more than 10% of revenues from the distribution of small firearms are excluded as well.
Military weapons: This tolerance level primarily excludes major military contractors and subcontractors. # The screen covers companies that manufacture military aircraft controls, spacecraft and missile controls, and industrial electronics and electric drives that also have military uses, and companies whose military work includes shipboard electronics, airborne training systems, range instrument systems, and mechanical systems, where those companies derive more than 5% of their revenue from such activities.
Firearms: The screen also covers companies deriving more than 5% of revenues from the manufacture or more than to 10% of revenues from distribution of firearms of pistols, handguns, rifles, shotguns, and handheld automatic or semi-automatic weapons and ammunition for such weapons.
Atomic, Biological and Chemical Weapons, Land Mines and Cluster Ammunition
Christian Super will apply an absolute exclusion to any company involved in the production or distribution of atomic, biological or chemical weapons, land mines and cluster ammunition. ## We reject these weapons as inappropriate in every sense. No tolerance level is applied to these forms of weapons.
# In particular companies that produce key components, i.e. components that are primarily developed or designed for use in weapons and also play a direct role in the lethality of the weapon systems.
## This includes the production of key components that are specifically designed for and are directly linked to the lethality of these weapons.