Positive & Negative Screening

What Is Positive Screening?

Positive, competitive investments
Ethical investing

Positive Screening

VFS Ethical portfolio actively choose to invest in companies that pursue the following:

Communal involvement 

There are arguments in favour of identifying and encouraging companies that make an active effort to contribute to communities they work in and to society as a whole, whether via donations or other means. However, not all investors will necessarily share the same priorities as companies in choosing which causes to support

Corporate Governance 

Corporate Governance provides a framework of accountability to a company’s owners, its investors and shareholders. Fundamentally, good corporate governance should facilitate good company performance, ensuring that it is managed in the best interest of its owners.

Disclosures

Investors, the public and government increasingly recognise the need for quality information on corporate policy and practice. For investors to be able to pick and choose between companies, it is essential they have sufficient information to make an informed decision.

Environmental

Public concerns about the degradation of the environment are becoming increasingly widespread. Companies have responded to this in a variety of ways, with a number of initiatives and approaches being adopted.

Equal Opportunities 

Some companies may have improved their equal opportunity records i.e. by developing a system to monitor the effectiveness of equal opportunity policies.

Positive Products & Services  

VFS Group has identified five groups of activity which can be seen as providing basic necessities, environmental products and other services which help in solving problems and making the world a safer place.

The five groups are

  1. Environmental Technology, including products such as machinery for recycling, wind power generators, and pollution abatement technology;
  2. Waste disposal companies
  3. Public transport and bicycles, including provisions of bus services and maintenance of railway tracks
  4. Safety and protection, for examples, alarm systems for elderly people living alone, fire alarms, life jackets and protective clothing
  5. Healthcare, including medicines, hearing aids and spectacles, housing, food and clothing.

Supply chain issues 

The quality of work conditions in global supply chains is a high profile issue of concern to many investors. Many companies are yet to address these concerns. An indicator of progress is the extent to which a company has developed policies to encourage, maintain and improve working conditions in its supply chain.


Ethical investing

Negative Screening

VFS Group seek to avoid investing in companies involved in the following:

Animal Testing 

The testing of cosmetic finishes products and ingredients on animals in no longer allowed in some countries. Some customers believe animal testing to be equally unacceptable in the production of other chemical products

Genetic engineering 

Genetic engineering and modern biotechnology are perceived by some to be unacceptable way of manipulating nature.

Healthy & safety breaches

Investors can show their disapproval of companies that break the rules by avoiding investment in those that have been successfully prosecuted by the Health & Safety Executive

High environmental impact 

Public concern about the degradation of the environment is becoming increasingly widespread.

Human rights

Investors have traditionally boycotted certain countries, but increasingly it is being argued that countries need investment to improve basic social and economic rights. Against this background some people have concerns about the activities of certain companies.

Intensive farming 

Many people are concerned about food quality, particularly food contamination, antibiotic residues and the use of growth hormones and pesticides.

Military 

Some people believe that the use of military force is unacceptable, either of defensive or offensive purposes.

Nuclear power 

The threat of radioactive contamination from an incident at a nuclear power station typifies the concerns many people have about nuclear power.

Pesticides

Excessive pesticide use can lead to the build-up of chemical residues through the food chain, damage to birds and insects, injuries  and deaths among farm workers and damage to animal and human immune systems. Some chemicals are also ozone depleting.

Pollotion convictions 

There has been increasing conserns in the last few years about the effects of environemntal pollution on health. A small number of prosecutions are carried out against companies each year as a result of non-compliance with legally issued notice or following a serious pollution incident.

Pornography and adult films 

Pornography is often objected to on the grounds that it may deprave, corrupt and degrade, contributing to sexual violence and sex discrimination. There has been rising public concern about internet pornography and worries about children using the internet and accessing offensive material.

Sustainable timber

Deforestation, including the clearance of land for agriculture, plantations and development, commercial logging and the collection of fuel wood can have damaging effects on the environmental and threaten the survival of certain wildlife.

Third World concerns 

Many investors are concerned that too many companies put profits before princlples in their dealings with the third world, and that by doing so they are actually contributing to third world poverty and its dependency on developed economies.

Traditional ethical concerns 

The production and sale of alcohol and tobacco, as well as profits from gambling, have concerned some ethical investors for many years.

Water pollution 

Often caused by industrial discharges, water pollution has both environmental and social impacts



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Ethical Investment

Insights

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May 18, 2016

SMSF’s are one of the fastest growing assets classes within the Australian financial landscape and for good reason. SMSF’s offer attractive tax incentives, greater opportunity to diversify assets and can be more cost effective than traditional retail or industry super funds. When it comes to diversification with an SMSF,  a trustee(s) is not limited by […]

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May 5, 2016

This weekend is Mother’s Day in Australia and there is no better time to show Mum that you appreciate all her efforts and hard work. It’s a day for the whole family, when Mums and Grandmas are bought flowers, taken out to lunch and showered with gifts. However with a bit of extra thought, you […]

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April 29, 2016

Perhaps you’ve never thought of your financial assets as worthy of bringing about social change or enough to change the world. However, a group of people, coming together to direct their funds to support ethical and socially responsible issues, can be an incredibly powerful catalyst for change. As anthropologist and author Margaret Mead (1901 – […]

Wealth

Advisors

VFS Group is a holistic financial services firm with an acute focus on wealth creation and management. Our mandate is to provide quality financial advice to all Australians.

Our mantra is centred around Knowledge, Strategy & Wealth. We invite you to take this opportunity to secure your future with us.
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Renera

Thompson

Renera has almost 10 years’ experience in the financial services industry with a focus on wealth creation using her strong analytical skills.