Exclusion policy

We define ourselves as long-term, quality-focused investors. Binding all of our investment decisions is a commitment that we will not pursue risk-adjusted returns to the extent that our actions will knowingly harm others. This means that there are certain people we would not invest with and some businesses that we would not own. In particular, this includes people with histories of corporate misdemeanours or businesses materially exposed to harmful products and services.

A key part of our approach to responsible investment incudes commitments to:

  • Support and uphold the fundamental principles of human rights;
  • Support international norms and standards enshrined in widely adopted treaties, conventions and codes of practice; and
  • Uphold the highest standards of environmental stewardship

Our determination of whether to invest is based on a holistic view of a company’s quality. The first step in our process is to assess whether the company has a social licence to operate, weighing if its business model and its products or services are fundamentally purposeful to society. We also consider if the consumption of one unit of the product or use of the service provided by the company can be deemed harmful to human health or society. Effectively, this rules out two areas entirely, including companies that manufacture certain types of controversial weapons1 (cluster munitions, anti-personnel mines, small arms, biological and chemical weapons, depleted uranium, nuclear weapons and white phosphorus munitions), and companies whose primary business is the manufacture of cigarettes or tobacco products.2

Apart from these two hard exclusions, there are countless grey areas where our clients expect further clarity on what exposure we might permit. This is a delicate topic and one we discuss at length among the team. Tobacco, defence, and gambling are easy sectors to exclude, but a blanket exclusion on natural resource companies is harder to validate, especially in cases where a company might play an important role in the transition to renewable energy.

Over and above these exclusions, we assess the quality of management and their means of addressing environmental, social and governance (ESG) issues. In our research, we look for evidence that the management operates the business effectively and in the interests of all stakeholders – both now and for the longer term. We believe that companies that do not look after their customers, employees, suppliers, and the larger community are unlikely to be rewarding long-term investments.

For companies that do not meet our quality criteria, there is no obligation for us to invest in them. This same consideration applies for companies we own but where the quality has deteriorated over time. We monitor companies and engage with management teams on a regular basis to evaluate whether their direction of travel on ESG matters remains positive. 

Environmental issues


We do not invest in companies where ownership of coal mines is a key part of the business. We impose a 10% revenue threshold measured on a rolling three-year average. We will continue to encourage the ceasing of coal related financing in our banking exposure.

Additionally, we will not invest in companies pursuing new: 

  • thermal coal extraction or generation projects; 
  • oil sands (tar sands) extraction projects; or
  • arctic oil and gas exploration or extraction projects

Deforestation and biodiversity

We expect companies that source or use palm oil to adhere to the policies of the Roundtable on Sustainable Palm Oil (RSPO) and have No Deforestation, No Peat, No Exploitation (NDPE) policies in place. Where this is not the case, we strongly encourage consumer companies to adhere to these policies or to consider aligning aspects of their operations to these policies. 

Social issues


We do not invest in companies involved in the production of tobacco products [2]. As an extension of our responsibility, we will continue to encourage the ceasing of tobacco industry relations in our banking and retail exposure.  


We do not invest in companies directly generating revenue from gambling.  


We do not invest in companies involved in the production or development of cluster munitions, anti-personnel mines, small arms, biological and chemical weapons, depleted uranium, nuclear weapons and white phosphorus munitions.


We do not invest in companies involved in the production or material distribution of pornography.

Governance issues


We do not invest in companies where systemic bribery is believed to be taking place. We expect companies to adhere to Principle 10 of the UN Global Compact.


We believe all companies should adhere to local tax legislation in both the letter and the spirit of those laws. Those that do not are likely to face a regulatory or consumer backlash, or both. We will not invest in companies that persistently flout local tax legislation. 

1 This includes all companies that manufacture controversial weapons and entities that own more than 50% of controversial weapons manufacturers, with an effective 0% revenue threshold. This does not extend to minority investments, where a parent company owns less than 50% of a company.

2 This includes all companies involved in the production of traditional cigarettes and other tobacco products (including cigars and chewing tobacco), but not including vaping or e-cigarette products, with an effective 0% revenue threshold. This does not extend to minority investments, where a parent company owns less than 50% of a company.


To the extent this website contains any measurements or data related to environmental, social and governance (ESG) factors, these measurements or data are estimates based on information sourced by the relevant investment team from third parties including portfolio companies and such information may ultimately prove to be inaccurate.

To the extent this material contains any ESG related commitments or targets, such commitments or targets are current as of the date of this publication. They have been formulated by the relevant First Sentier Investors (FSI) investment team in accordance with either internally developed proprietary frameworks or are otherwise, based on the Institutional Investors Group on Climate Change’s (IIGCC) Paris Aligned Investment Initiative framework. The commitments and targets are based on information and representations made to the relevant investment teams by portfolio companies (which may ultimately prove not be accurate), together with assumptions made by the relevant investment team in relation to future matters such as government policy implementation in ESG and other climate-related areas, enhanced future technology and the actions of portfolio companies (all of which are subject to change over time). As such, achievement of the commitments and targets set out on this website depend on the ongoing accuracy of such information and representations as well as the realisation of such future matters. FSI will report on progress made towards achieving these targets on an annual basis in its Climate Change Action Plan. The commitments and targets set out on this website are continuously reviewed by the relevant investment teams and subject to change without notice.