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Investment Approach to Core Issues

Human Rights and Well-Being

We want a world where all people enjoy the same basic rights and opportunities. Not only is inequality inherently unjust; it is a barrier to human potential and a precondition for major global challenges like war, poverty, famine, and disease. One way we can combat these conditions is by rewarding corporate leaders and bond issuers who are addressing human rights issues among their own communities, customers, supply chains, employees and other stakeholders. When we reward these positive developments with increased investment, we believe we can inspire more institutions to follow suit.

Investments we universally screen out based on human rights factors include companies significantly involved in defense or weapons, retail gun sales, private prisons, tobacco, gambling or pornography. We avoid holdings with significant controversies related to product or workplace safety, discrimination or harrassment.

But we believe the things we do look for are just as important. Two critical human rights factors we consider when making investments are fair labor practices and strong supply chain standards. We give preference to institutions that minimize internal income disparity, prioritize fair trade, and have strong transparency throughout their supply chains. Such commitments can advance global equality, and disincentivize practices such as forced or child labor.

Because we believe institutions should treat customers and constituents as core stakeholders, we look for fair and transparent pricing practices. Likewise we try to avoid investments where customer data has been egregiously compromised, or where bad-faith sales or advertising practices have damaged consumer trust.

We additionally seek out companies offering products and services that advance the common good. Cutting-edge gene therapies addressing previously untreatable diseases, cleaning products that safeguard workers and the environment, and instruments that measure air, water and soil quality are just a few examples from our current or previous holdings. At the same time, we do give points for trying. While we always avoid companies whose products and services we view as detrimental to society, we may invest in those whose products and services are not universally beneficial, if their practices in multiple other respects (e.g. fair sourcing, strong labor practices, charitable giving) are exemplary.

Finally, our positive and negative human rights screens never stop evolving. As more issues come to light, or new best practices become clear, we continue to pursue investments we believe are strong among their peers on human rights issues, and re-evaluate those we already hold in light of any new development.

For more information on how Prentiss Smith & Company considers human rights in our approach to investment, please contact us.