Our ethical criteria

Any money contributed to our ethical CTF will go into a unit trust called the Family Charities Ethical Trust (FCET). The objective of this fund is to achieve long term growth of capital while avoiding investments in companies that do not meet our ethical criteria.

To help us do this, we use the Ethical Investment Research Services (EIRIS) Limited (an independent research service). We provide them with a list of activities a company may undertake that would make the company unacceptable for investment in the FCET. EIRIS research all the companies listed on the FTSE All Share Index and then let us know which of those companies do not meet our ethical criteria.

This list of unacceptable activities is summarised below:

• Companies operating in tropical regions whose activities include forest clearance
• Companies who manufacture or supply ozone depleting chemicals
• Companies who manufacture pesticide products
• Companies who manufacture chemicals of concern*
• Companies who manufacture internationally restricted chemicals (UNEP 12, OSPAR list of chemicals for priority action)
• Companies with no or limited sustainable timber sourcing standards and who have high or very high estimated annual timber usage
• Companies that have breached water pollution discharge consent within the last 3 years
• Companies that have been fined at least £10k for water pollution offences within the last 3 years
• Companies with a large presence in countries with little or no evidence of a policy of system to address human rights issues
• Companies with greater than 33% of their turnover coming from the sale or production of alcohol
• Companies who have tested cosmetics on animals within the last 5 years
• Companies deriving any turnover from intensive pig or poultry farming
• Companies owning or operating fish farms
• Companies owning or operating abattoirs or poultry slaughterhouses
• Companies with greater than 5% of their turnover coming from military sales
• Companies that provide adult entertainment services (other than through mobile telecommunications)
• Companies that publish or wholesale pornographic magazines or newspapers
• Companies with over 33% of their turnover coming from tobacco sale or production

*EIRIS has drawn up its own list of chemicals, or groups of chemicals, which it believes to be of most concern, as identified by regulators and non-governmental organisations.

This list may be amended and/or refined at any time as long as the criteria continue to support FCET's investment objective.

Occasionally, the Family Charities Ethical Trust will hold stocks that may not comply with the ethical investment criteria. This could be, for example, because the stock is a new issue where no firm criteria on the company's ethical position was available at the time the stock was purchased, or where a company has changed strategy and no longer meets the defined criteria, or the criteria itself has changed. In these circumstances, the Investment Adviser will seek to sell any non-compliant holdings as soon as is reasonably possible.

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