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Exclusionary Screening
Exclusionary Screening
Since Trillium’s founding in 1982, we have employed exclusionary screens across industries and business models we conclude are too risky to warrant investment or are at odds with our values as a firm.
TRillium's APPROACH TO ESG INTEGRATION — PDFWhile much of Trillium’s ESG integration focuses on attributes we positively seek in investee companies, exclusionary screening remains an important tool to aid in managing exposure to risk and adherence to our investing principles, as well as part of our efforts to align with clients’ values and investing preferences. We periodically review our exclusionary screen coverage and methodology in effort to ensure the screens account for current societal, regulatory, scientific, or other norms.
Agricultural Biotechnology
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies which earn 5% or more of revenues from genetic engineering business activities related to agriculture. The screen specifically applies to agricultural companies directly involved in the production of genetically modified organisms, and does not include food retailers, food producers or manufacturers of food ingredients.
Casinos and Gaming
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies which earn 5% or more of revenues from gambling related business activities including operation, support, licensing or ownership. Support specifically relates to companies that provide key products or services fundamental to gambling operations including slot machines, roulette wheels, or lottery terminals, gambling technology and services such as IT maintenance, software design, security or surveillance systems, lottery ticket printing, credit lines, and casino management and consultation.
Coal Mining
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies that earn 5% or more of revenues directly from coal mining. The screen does not include service companies or equipment manufacturers.
Hard Rock Mining
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies that earn 5% or more of revenues directly from mining or quarrying hard rock. The screen does not include service companies or equipment manufacturers.
Pornography
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies that earn 5% or more of revenues from adult entertainment, including producers, distributors, and retailers.
Private Prisons
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies that earn 5% or more of revenues from companies that operate private prisons, jails, detention centers or correctional facilities. The screen does not include companies that service or equip these facilities.
Tar Sands & Arctic Drilling
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies that earn 5% or more of revenues directly from the extraction of tar sands, sometimes known as oil sands. Additionally, Trillium excludes companies that earn 5% or more of revenues directly from Arctic drilling for oil or gas. The screen does not include service companies or equipment manufacturers.
Tobacco
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies which earn 5% or more of revenues from the production, distribution, licensing, or retailing of tobacco products, such as cigars, cigarettes, e-cigarettes, inhalers, smokeless tobacco, snuff, chewing tobacco, etc. Companies that grow or process raw tobacco leaves are included in the definition. Additionally, Trillium excludes companies that earn 5% or more of revenues from the manufacture and supply of key products necessary for the production of tobacco products.
Weapons and Firearms
Limits harmful pollutants and chemicals
Responsible raw material management
Actively lowers greenhouse gas emissions
Utilizes renewable energy sources
Trillium excludes companies which earn 5% or more of revenues from the production of conventional weapons; weapons related support systems and services; weapons systems, components and support systems and services; manufacture of landmines whole systems or components; or the manufacture and retail of civilian firearms and ammunition. Additionally, Trillium has a zero tolerance for companies that earn any revenues from the production of nuclear, biological, or chemical weapons and related systems or components.
Download Our Brief on Exclusionary Screenings
Download the Full Exclusionary Screening Process, Approach and Definitions
Ongoing Screening:
In addition to the above screens, we periodically review and restrict companies with major recent or ongoing controversies in areas such as:
- Animal Welfare
- Environment
- Governance
- Human Rights
- Product Safety
Note on Fossil Fuels:
It is clear the world’s climate is changing at a rapid pace, as human activities pump more greenhouse gas emissions (GHGs) into the atmosphere every year. Trillium acknowledges that no genuine effort to slow or combat climate change can ignore the Energy and Utilities sectors. Investing in companies that do not proactively manage these climate-related risks and opportunities exposes portfolios to unnecessary, material risks. As long-term oriented, sustainability-focused investors, Trillium seeks to invest in companies that seize transition opportunities to move towards a net zero greenhouse gas emission economy, while avoiding those companies not likely to successfully minimize their climate risks.
We look to invest in companies with a business model designed to succeed in a low-carbon economy. At the same time, we avoid investing in companies with the greatest transition risks, namely fossil fuel companies without a transition plan we find credible. We apply this framework to companies in the Energy and Utilities sectors (excluding Utilities companies without power generation), as well as any company deriving 50% or more of revenue from sales to Energy or Utilities companies (excluding Utilities companies without power generation). At a minimum, to be considered for investment, these companies must derive at least 10% current revenue from renewable energy or enabling technology, and no commitments to invest in new fossil fuel exploration, production, storage, transport (excluding distribution), trading, or refining capacity; or new fossil fuel-based power generation without emissions capture.
This approach is in line with our commitment to align our portfolios with a net zero economy, as members of the NetZero Asset Managers Initiative. Learn more about Trillium’s approach to investing in energy and power.
Important Information: There is no assurance that impact or investment objectives will be achieved. This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities purchased, sold or recommended for advisory clients.
