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 Our position on harmful and controversial products and services

Our position on harmful and controversial products and services

Stewart Investors invests in the shares of high quality companies that are well positioned to contribute to, and benefit from, sustainable development.

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Stewart Investors invests in the shares of high quality companies that are well positioned to contribute to, and benefit from, sustainable development.         

We believe that fully incorporating sustainability considerations into our investment process is the best way to protect and grow capital for clients. As an output of our bottom-up investment process, we do not invest in companies with material exposure to harmful products and services, or who fail to discharge their environmental stewardship and human rights responsibilities.

All members of Stewart Investor’s investment team sign our Hippocratic Oath, which includes the commitment that we will not pursue risk-adjusted returns to the extent that our actions will knowingly harm others. In accordance with our investment philosophy and strategy, the investment team is responsible for avoiding the allocation of client capital to harmful activities.

Material exposure disclosures

For instances of companies held across the Stewart Investors strategies which were above the materiality threshold in any of the relevant activities outlined in our position statement see below.


We do not use quantitative thresholds in the quality assessment of companies in our investment process. For example, we prefer companies to manage their balance sheets conservatively but do not set specific debt thresholds. Our analysts and portfolio managers must be able to justify, and are accountable for, the decisions they make. 

However, for harmful products and controversial industries, we appreciate that our clients reasonably expect clarity on what exposures they may have to negative activities. The table below includes information on the activities and practices we find inconsistent with our investment philosophy. We have set a materiality threshold for direct involvement in the relevant activities of 5% of revenue, and for tobacco production and controversial weapons 0%. Where we cross this threshold we will report the investment to clients.

Transparency and exceptions

We will be transparent about our portfolio holdings. In rare instances, we may make investments where exposure is above the stated threshold, but in those cases we will disclose our reasoning for maintaining that holding. 

As our focus is on companies well-positioned for sustainable development, the reasons for such holdings could include indirect involvement, for example, a company which provides safety products or technology solutions to a wide range of industries also providing those products/solutions to the fossil fuel industry to improve energy efficiencies and reduce environmental impact. Exceptions may also relate to legacy activities which are being wound down or where the company is not increasing capital expenditure. In these cases we must determine the company is making a meaningful contribution to sustainable development. Where we believe necessary, we will encourage and support the company in exiting these business activities. 


We employ the services of an external environmental, social and corporate governance (ESG) research provider who reviews our portfolios and provides quarterly reporting on company involvement in harmful industries and breaches of social norms, like those found in the UN Global Compact. These reports are reviewed by the investment team. We also receive regular updates from controversy monitoring service RepRisk. 

While for some of these activities revenue thresholds are possible, in others like environmental stewardship, ethical conduct and tax practices, judgement and knowledge of the company are required. We believe that in many cases engagement can be an effective lever for change. Where we agree with issues raised by our external ESG research providers, we will endeavour to engage with the company in question. However if the issue is verified and engagement shows no prospect of change, we will divest to ensure the portfolio continues to meet the principles which sit at the heart of our investment philosophy.

Material exposure disclosures

We believe transparency is vital for the credibility of sustainable investment approaches. For activities and practices we find inconsistent with our investment philosophy we have set a materiality threshold for direct involvement in the relevant activities of 5% of revenue (unless otherwise stated). The full list of activities is shown above. In the instances, we may make investments where exposure is above the 5% threshold, we are happy to disclose our reasoning for maintaining that holding.

See below for instances of companies held across the Stewart Investors strategies which were above the materiality threshold in any of the relevant activities, as at 31 March 2023.


Strategies held in: Worldwide Leaders Sustainability 

Activity exposure >5% revenue: UN Global Compact Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.

Reason for exception/holding: The company is facing lawsuits and investigations over alleged health risks associated with their sleep apnoea and respiratory care devices. The affected portion of the business represented 6.5% of group sales in FY2020, the year before the recall. 

The company has recalled impacted devices, and has not yet been found liable for these claims. Our external research provider has put the company on a watchlist and we continue to monitor the situation and engage with the management team.

Spirax-Sarco Engineering  

Strategies held in: European Sustainability, Worldwide Sustainability 

Activity exposure >5% revenue: Supporting Oil & Gas

Reason for exception/holding: The company provides precision heat and control equipment and systems that improve energy efficiency for customers operating in the oil industry. 

Revenues derived from oil and gas supporting products and services accounted for 5% of the company's overall revenue in FY2021.

Tata Consultancy Services (TCS)

Strategies held in: Asia Pacific Sustainability, Asia Pacific Leaders Sustainability, Asia Pacific including Japan Sustainability, Global Emerging Markets Sustainability, Global Emerging Markets Leaders Sustainability, India Subcontinent Sustainability, Worldwide Leaders Sustainability, Pacific Assets Trust

Activity exposure >5% revenue: UN Global Compact Principle 2: Businesses should make sure that they are not complicit in human rights abuses

Reason for exception/holding: TCS has no direct involvement in nuclear weapons or energy, however our external research provider considers the company to be involved because its parent company, Tata Sons, owns greater than 50% of TCS. 

Tata Sons involvement is due to the company owning Tata Advanced Systems which acquired Tata Power’s Strategic Engineering Division. The Strategic Engineering Division provides control systems for the Indian Navy’s nuclear missile submarines. 

As India has not signed the Treaty on the Non-Proliferation of Nuclear Weapons, the external data provider considers Tata Sons and by extension TCS to be in support of the nuclear weapons programme of India. We disagree with this assessment and do not see anything in the activities or conduct of the company to question its sustainability positioning or the investment case.


Strategies held in: Global Emerging Markets Sustainability, Global Emerging Markets Leaders Sustainability, Worldwide Sustainability, Worldwide Leaders Sustainability

Activity exposure >5% revenue: Supporting Oil & Gas, and Supporting Thermal Coal

Reason for exception/holding: The company manufactures and sells renewable energy solutions used in solar and wind power generation, hydroelectric power plants and biomass helping society to shift away from fossil fuel energy production. WEG also manufacture and sell energy efficient electric motors, which help their customers reduce their energy requirements and greenhouse gas emissions.

Revenues derived from oil and gas supporting products and services, and thermal coal supporting products and services accounted for an estimated 2.5% per activity (5% in total) of the company's overall revenue in FY2021, according to our external research provider.

Thermal coal exposure for supporting products and services was added by our external research provider in early 2023 and we contacted the company directly to check the 2.5% revenue estimates provided. Given that coal is not a strategic market segment for their products or customers, the company estimate that <1% revenues to be a more accurate reflection of their exposure.

Further information

Normative screening 

Through the services of an external environmental, social and corporate governance (ESG) research provider, we monitor investee companies compliance with the United Nations Global Compact (UNGC), the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises (OECD MNE Guidelines) and the United Nations Guiding Principles on Business and Human Rights (UNGPs), as well as their underlying International Labour Organization (ILO) conventions and treaties.

Environmental issues 

Environmental stewardship 

Sustainable sourcing and environmental stewardship are critical considerations in our company analysis. We consider a range of factors (including but not limited to) when assessing a company’s environmental stewardship such as: upstream and downstream pollution; waste management; resource consumption; water use and scarcity; emissions reduction; use of renewable energy; recycling successes; product lifecycles and their circularity; as well as attitudes and actions towards the protection, conservation, and sustainable use of biologically diverse ecosystems and habitats within operations and supply chains.

Forward contracts

While some of our funds have the ability to invest in forward contracts, we do not invest in these and would not purchase forward contracts on agricultural commodities for the funds.

Fossil fuels

We define fossil fuels as: coal, unconventional oil & gas (artic drilling, oil sands, shale energy), and conventional oil & gas. We consider the following related/supporting products/services: exploration, extraction, power generation, transportation, distribution, refining or providing dedicated equipment or services as part of the value chain. 


  1. The Ottawa Convention, also know as the Mine Ban Treaty is the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction. It was adopted in 1997 and it entered into force on 1 March 1999.

    The Oslo Convention is the Convention on Cluster Munitions. It was adopted in 2008 and came into force on 1 August 2010.

Investment terms

View our list of investment terms to help you understand the terminology within this document.

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Important information

This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure. Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.

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References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which is ultimately owned by Mitsubishi UFJ Financial Group, Inc (MUFG). Our investment team operates under the trading name of Stewart Investors which is part of the First Sentier Investors Group.

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