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.
Alcohol, while permissible, has significant negative impacts on the community in general. Therefore, Christian Super will avoid in its investments any company that derives more than 5% of its revenue from alcoholic beverage production or 20% of its revenue from their 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 seek to avoid investment into companies that are below the 20% 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. Christian Super will screen companies involved in farming practises of overcrowding or factory farming and exclude on a case by case basis companies that do not allow animals time outside or space to walk. We will also consider any cases of the live exportation of animals that involves poor planning or management resulting in unnecessary animal suffering. Christian Super will also exclude companies that continue to conduct animal testing unnecessarily without consideration to the “3R’s” of replacement, reduction and refinement of animal testing procedures.
Bribery & Corruption
Christian Super will exclude companies where:
- There is proof of, or our research indicates, a high likelihood of involvement in bribery or corruption; and
- Denial of wrong-doing is continuing and/or tangible commitments 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 the development of appropriate policies and practices to prevent future occurrences of corruption. This may include an 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 improvements could be made.
Christian Super appreciates that while there are potential medicinal benefits to cannabis-based products, the harmful effects of recreational use are personally and societally harmful. Therefore, Christian Super will exclude any company who derives more than 5% of their revenue from the production or 20% of their revenue from distribution of cannabis and its related products for recreational use.
Companies involved in production and distribution for medicinal use and research will not be excluded from the investible universe.
Where inappropriate business activities arise which are unrelated to any of the existing topical positions, but in clear contravention of the Fund’s Ethical Charter which identifies particular behaviours as being inconsistent with a Christian approach to investment, the Fund will exclude the company on a case by case basis. These behaviours include the deliberate or indiscriminate destruction of human life, the abuse of human dignity and freedoms, the damaging of health and well-being, the wanton destruction of creation in pursuit of short-term profit and reaping reward from unjust behaviour.
Christian Super considers care for creation and environmental stewardship as Biblical principles of importance. The Fund views climate change as a material investment risk and acknowledges that current evidence points towards a human contribution. In the area of carbon emissions and energy use, Christian Super will favour the best performers within each sector and seek out investments which mitigate climate change. Companies with poor climate change policies and practices will receive a lower internal rating and in extreme cases will be excluded.
With regard to coal seam gas (CSG) and shale gas (SG), Christian Super acknowledges that there are inherent environmental and social risks associated with CSG, including disruption/pollution of water tables, violation of land rights and fugitive greenhouse gas emissions. The Fund also acknowledges that when carried out to a high standard CSG and SG can offer a viable alternative to other polluting energy sources. As a result, Christian Super will invest in companies that have in place strong ESG risk management procedures with regards to these energy sources. Those companies which fail to meet these standards will be excluded from the Fund’s investable universe.
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 give special consideration in the case of companies focused on socially-aware impact investing, such as in microfinance.
Christian Super will encourage responsible use of debt among its members and the wider community.
Christian Super recognises the widespread negative effects that obesity has on human health and flourishing. Although the obesity epidemic stems from a variety of issues – genetics, exercise, food choices – we recognise the importance of the food environment in which we operate to allow individuals to make responsible food choices, and the responsibility on companies that supply our food.
Christian Super places a focus on sectors and companies that supply food which contribute to the problems of unhealthy eating by providing nutritionally empty foods, by not providing healthy alternatives in their product range, and by manipulating their food content to encourage excessive and unhealthy levels of consumption.
Christian Super will review major food (including fast food) producers to assess their overall commitment to nutrition and health through their product range, marketing practices and promotion of active lifestyle, with a view of excluding those companies that consistently perform below industry standards.
Christian Super will exclude companies deriving more than 15% 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
When global electricity generation from renewable energy sources surpasses generation from coal, the 15% revenue tolerance will be reduced to 10%. The primary principle underlying this exclusion is the desire to exclude companies involved in activities associated with the highest greenhouse gas emission intensity.
Christian Super does not apply a revenue-based exclusion to companies involved in exploitation of oil & gas resources. However, in recognising the need for companies in the oil & gas sectors to move towards lower overall emissions, companies that consistently display a worst-in-sector approach through a lack of readiness to adapt will be excluded from the portfolio.
Further consideration of exclusion for companies deriving the majority of their revenue from oil will be made once electric vehicles represent a viable alternative to existing vehicles, which shall be considered to be when they reach either 5% of new motor vehicles sold or 2% of total motor vehicle stock.
For domestic equities, a more nuanced range of additional factors (such as climate change preparedness and transition to renewable energy) may be considered in the analysis of whether exclusion is warranted.
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, and become more widely-used, the position will be adjusted accordingly.
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-related products and services. This includes, but is not limited to:
- Operation or ownership of gambling establishments e.g. casinos, online gambling sites, race tracks
- Production of gambling machines e.g. slot machines, video lottery terminals
- Production of gambling software
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,
- Cause undue harm, particularly by causing disadvantage to those in need, or
- Create undue dependence on their products (e.g. agricultural terminator genes)
Human Rights & Responsibilities
Christian Super accepts the important role of Human Rights as a tool to helpfully express biblical truths and principles. The Fund will exclude any company where human rights violations result as a direct consequence of that company’s actions or inactions. The Fund will use its discretion in the application of human rights, acknowledging that in some instances human rights will come into conflict with themselves and also need to be subordinate to Christian truths in their importance.
Reference may be made to international norms developed by international bodies such as UNGC (United Nations Global Compact), ILO (International Labour Organisation), UNICEF (United Nations Children’s Fund) and the UNHRC (United Nations Human Rights Council).
For country-based exclusions, a severity scale is used to guide decision-making. Companies providing an essential good or service will not be excluded from the investment universe. Conversely, companies that have direct business relationships with the government, do not provide a significant benefit to the local community, or do not have substantial corporate governance policies will be excluded.
In our analysis, we treat companies differently depending on the period of time that they entered the country. Leniency will be given to companies which commenced operations in a country prior to the deterioration of the political situation. Conversely, we will be stricter with companies entering during a time of ethical concern.
In extreme cases, some countries are too high a risk factor and any companies operating in these countries will be excluded.
Central African Republic
Given the internal quasi-religious conflicts involving armed rebel groups which commit regular human rights abuses, there is a risk of directly or indirectly supporting these groups. One rebel group at the centre of the conflict is also claiming to be Christian, which poses a significant reputational risk for the Fund.
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 moderate severity rating.
Given Iran’s nuclear-related measures have recently been met under the Joint Comprehensive Plan of Action (JCPOA), the UN and most developed nations have lifted the majority of sanctions that were previously in place. Due to its recency, the Fund will continue to maintain a moderate severity rating.
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. New companies entering Myanmar post-democratic election will be assessed on a case by case basis.
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 Russia’s unlawful annexation of Crimea and oppression of cultural minorities there, as well as continuing political and military conflicts with Ukraine, there is concern for the ethical risks involved in association with companies operating in this contested area.
Due to their ongoing support for military conflicts in Yemen, as well as political campaigns against other countries not aligned with their beliefs, there is much concern for involvement in Saudi Arabia. In addition to this, the oppressive and sometimes violent legal systems and cultural practices in the country systematically disregard human rights and freedom of speech. As such, there is a high risk involved in investing in companies operating in Saudi Arabia.
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.
While a formal peace agreement is in place between warring parties, fighting and instability continues to persist. Deeply rooted political and ethnic tensions continue to drive economic instability and ultimately the humanitarian crisis that currently plagues South Sudan. For any company operating in South Sudan, there is a high risk of corruption and complicity with the humanitarian crisis, and as such will be excluded.
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.
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. The Fund will therefore seek to exclude any company with operations in Syria.
Due to the complex legal status of the territory it is difficult for nations to decide upon appropriate action. The Fund will seek to exclude any company operating in Western Sahara.
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.
Christian Super affirms the right to a safe and healthy working environment. On a case by case basis, we will engage with, and in the most systemic and egregious cases exclude, companies who fail to uphold appropriate standards in relation workplace safety, freedom of association, forced labour, child labour, discrimination, harassment and other similar practices. We also recognise the responsibility companies have to ensure appropriate labour standards within their supply chains.
Christian Super will also 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 consistently involved in a material level of improper marketing where there is no attempt to rectify such improper marketing upon engagement.
Improper marketing shall be taken to include:
- Marketing that deliberately lies and deceives
- Marketing of products to the vulnerable (including children) that damages their health and/or overall wellbeing
- Marketing agencies where the majority of their business promotes products or services that we have excluded on ethical grounds
- Highly sexualised or violent advertising
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 will seek to promote good ocean stewardship through its investment portfolio. This will include avoiding investment in companies and technologies that negatively affect the ocean, whether through pollution, promoting climate change, or over-fishing, and positive investment in companies that show initiative in these areas or promote positive technologies.
Sanctity of Life
Christian Super values all human life as God’s creation, made in his image and to be treated with honour, respect and care. God entrusted humans to be stewards of His creation, including the care and wellbeing of others.
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 direct 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 are known to prevent or specifically claim to 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.
Christian Super recognises the significant positive contribution that health care and hospitals have to human flourishing, while also recognising that, in many countries, the provision of medical care can occasionally involve treatments or procedures that are contrary to the Fund’s views on the value of all human life (for example, the performance of elective abortions, the provision of abortifacient medication or devices, or the administration of euthanasia).
Christian Super will actively seek to invest in health care and/or hospitals, particularly where it involves the development of new facilities and services in previously underserved areas. At the same time, every investment in health care and hospitals will be reviewed on a case-by-case basis, to ensure that any involvement in objectionable treatments or procedures is incidental to the overall provision of health care and is immaterial in the context of the overall investment made. In making this consideration, Christian Super will consider not only the nature of services provided or likely to be provided, but also the health care context of the services, the country’s laws with relation to abortion and euthanasia.
Christian Super will not invest in health care and hospitals where objectionable activities form a material component of services provided, or where revenue from such services is material.
In relation to capital punishment, we recognise the significant efforts made by pharmaceutical companies to prevent their drugs from being used in lethal injections. We may consider engagement where more efforts are possible.
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 or adult entertainment.
The Fund will apply a 5% of revenue exclusion on the distribution of adult entertainment and inappropriate products. This is to ensure companies with immaterial exposure are not unduly removed, such as Pay TV operators, Cruise Ships and Hotels where adult TV channels are provided as part of a broader subscription TV service, but are not a part of the core business of the company.
Christian Super recognises the benefits to medical science that research around stem cells poses. However, given the destruction of life involved in embryonic stem cell research, Christian Super will exclude any company involved in stem cell research that involves the destruction of human embryos.
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.
Therefore we will exclude companies involved in uranium mining if they are found to be exporting uranium to states that are not in compliance with the International Atomic Energy Agency (IAEA) safeguards. Further, we will carefully watch owners and operators of nuclear power plants and exclude on a case by case 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 exclude on a case by case basis that is involved in the promotion of inappropriately violent real-life activities for entertainment. Consideration will be given to a company’s level of involvement or support for the activity, as well as the nature and intention of the activity. With regards to the activity we will give consideration to the extent of harm required before participants receive medical treatment, the extent to which the activity promotes a culture of violence as entertainment and the intention behind the violence, tactical or otherwise.
Christian Super will exclude companies that:
- Flagrantly ignore their responsibilities to appropriately address waste stewardship practices in their own operations and supply chains; and
- Do not demonstrate a tangible commitment to taking appropriate action to manage waste.
Christian Super expects companies to avoid excessive or illegal contamination of soil and water and excessive or illegal air pollution, as well as to show concern for indigenous and/or local communities and for the waste effects of their products and services over their whole life cycle.
To be considered for re-inclusion, companies must demonstrate a tangible commitment to taking appropriate preventative action over time, which may include admission of wrong-doing, co-operation with authorities, improvement of policies and practices or other similar actions.
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. This includes the production of key components that are specifically designed for and are directly linked to the lethality of these weapons.
Firearms: This 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.
Controversial Weapons (Absolute)
Controversial weapons are weapons which are indiscriminate in targeting and disproportionate in impact, on civilian populations; the effects of which may continue long after initial deployment. These include atomic, biological or chemical weapons, as well as anti-personnel land mines and cluster munitions.
Christian Super will apply an absolute exclusion to any company involved in the production or distribution of controversial weapons. This includes the production of key components that are specifically designed for and are directly linked to the lethality of these weapons.