Liontrust SF Corporate Bond

The Fund aims to provide a higher long term return than that provided by UK Government bonds. Although there is some potential for the value of the Fund to grow, over the long term most of the returns are likely to be in the form of income. Long term is generally regarded as 5 years or more.

Negative

Alcohol Production

Excludes companies producing alcohol that do not have policies and practices to address responsible marketing, consumption and sale of their products.

Alcohol Retail

Excludes companies retailing alcohol that do not have policies and practices to address responsible marketing, consumption and sale of their products.

Animal Testing Non-Medical

Excludes companies that derive more than 10% of turnover from the provision of animal testing services. Also excludes companies that derive more than 10% of turnover from the manufacture of household products, cosmetics or cosmetic intermediates that are tested on animals, or from the retailing of own-brand cosmetics that are tested on animals, unless the company policies and programmes to minimize testing are considered good practice.

Animal Welfare (Fur)

Excludes companies that derive more than 10% of turnover from the fur trade.

Intensive Farming

Excludes companies that derive more 10% of turnover from intensive meat and fish farming.

Armaments

Excludes:

  • Companies that are major producers of full weapons systems or critical components of weapon systems. Major producers are defined as having more than 10% of turnover and/or more than £100m revenue from offensive weapons systems; and

  • Companies with confirmed involvement in the manufacture of anti-personnel mines or cluster munitions, or their critical components, as defined by the Ottawa Mine Ban Convention and the Oslo Convention on Cluster Munitions.

Environment Climate & Fossil Fuels

Excludes companies that derive >10% of turnover from the extraction and production of coal, oil, and natural gas;

  • Excludes companies that derive >10% of turnover from airlines and the manufacture of cars (unless they are specialised in making components that improve the efficiency or safety of cars) and trucks;

  • Excludes companies that derive >10% of turnover from the production of energy intensive materials unless they are making significant efforts and investment to make their processes more efficient and less energy intensive.

Gambling

Excludes companies that derive more than 10% of turnover from the management or ownership of gambling facilities.

Human Rights Violation

With reference to international laws and standards including the International Labour Organisation's core conventions on child labour, equal opportunities, forced labour, freedom of association, and collective bargaining, the fund excludes companies judged by the SRI Team to be failing to address serious allegations of:

  • Violations of international human rights laws and standards including the OECD Guidelines for Multi-National Enterprises (2000) and the UN Global Compact (2000), among others; and

  • Breaches of labour standards such as those on child labour, forced labour, discrimination, union rights, working hours and health & safety.

Nuclear Power/Services

Excludes:

Companies that derive more than 10% of turnover from owning or operating nuclear power stations, unless the company has made significant investments (more than 10% generation capacity) in renewable energy, and does not have the option to divest their nuclear capacity;

  • Companies that derive more than 10% of turnover from the development or manufacture of non-safety related products for nuclear power plants; and

  • Companies that derive more than 10% of turnover from uranium mining or reprocessing of nuclear fuel.

Pornography

Excludes companies that derive more than 10% of turnover from the production or distribution of pornographic material; and companies that derive more than 10% of turnover from owning or operating adult establishments.

Tobacco Production

Excludes companies that derive more than 10% of turnover from the manufacture of tobacco products.

Tobacco Retail

Excludes companies that derive more than 10% of turnover from the sale of tobacco products.

Positive

Engagement Approach

The SRI Team aims to use its influence as a shareholder to promote good practice among the companies in which it invests, focusing on areas where it believes improved management of social, environmental or governance issues will enhance or protect shareholder value. This engagement activity is the key way in which it promotes more sustainable corporate behaviour and encourages the shift to a more sustainable economy.

Environment Climate Change Positive

The Sustainable Future investment process involves scoring companies on their business activities and approving those that meet an acceptable position in terms of the management of any adverse issues. Companies involved in environmental technology would be highly scored and therefore likely to be available for investment. For companies that derive more than 10% of turnover from the production of energy intensive materials and other high impact activities, the SRI Team would expect management to have introduced substantive steps to minimise greenhouse gas emissions.

Environment Management Positive

The Sustainable Future investment process involves scoring companies on their business activities and approving those that meet an acceptable position in terms of the management of any adverse issues. Companies with a positive environmental management approach score highly in this process and are likely to be available for investment.

Environment Technology Positive

The Sustainable Future investment process involves scoring companies on their business activities and approving those that meet an acceptable position in terms of the management of any adverse issues. Companies involved in environmental technology would be highly scored and therefore likely to be available for investment.

Health Positive

Quality of Life is one of the four main environmental, social and governance themes that the SRI Team applies in the process of generating investment ideas, and includes research and analysis of companies providing healthcare services and promoting healthy lifestyles. The Sustainable Future investment process involves scoring companies on their business activities and approving those that meet an acceptable position in terms of the management of any adverse issues. Companies involved in the provision of health services and related activities would score highly in this process and are likely to be available for investment.

Human Rights Positive

Companies operating in weak governance zones are encouraged by the SRI Team to demonstrate their commitment to the integration of human rights and international labour standards into business practices, and to put in place appropriate human rights and labour standards policies, systems and reporting.