Policy clause
"No tobacco, controversial weapons or thermal coal": how to write it, test it and evidence it
An exclusion clause bars named activities from the portfolio. It becomes testable once the policy names the screening source, the revenue thresholds per category and the treatment of unscreened holdings. Acclimetry's exclusion screen reads each holding's verdict from an approved data source and treats an unscreened holding as a gap, not as clean.
The portfolio will not invest in companies involved in tobacco, controversial weapons or thermal coal.
exclusion_listQuestions to settle before it can be tested
- Involvement: any revenue, or above a threshold such as 5% for thermal coal? Producers only, or distributors and retailers too? The screening source applies the thresholds.
- Controversial weapons: cluster munitions and anti-personnel mines only, or chemical, biological and nuclear weapons too?
- Pooled funds: the screen reads holdings, not the companies inside a fund, so a fund needs its own verdict.
- Coverage and dates: which dataset, as at which date? A holding with no verdict blocks a clean reading.
As a testable rule
Exclusion screen template, screen type ethical, verdict field EXCLUSION_FLAG, with Tobacco, Controversial weapons and Thermal coal meaning excluded. The approved source, dataset and as-of date are recorded on the version. Any excluded holding is a breach regardless of weight, and unscreened holdings block a clean reading.
A testable wording
The portfolio will not hold companies deriving more than 5% of revenue from tobacco production or thermal coal mining. Any involvement in cluster munitions or anti-personnel mines is excluded. The approved screening provider's latest dataset decides.
See screening data coverage and the exclusion list entry.
Worked example
One holding flagged Tobacco by the approved source breaches the screen at 2% of the 8m portfolio; the weight shows materiality only.
Rule template:exclusion_list screen: ethicalfieldCode: EXCLUSION_FLAGexcludedValues: Tobacco, Controversial weapons, Thermal coalsourceName: Approved screening providersourceDataset: Exclusion categoriessourceAsOf: 2026-09-30requireScreenCoverage: true
| Holding | Class | Market value | EXCLUSION_FLAG |
|---|---|---|---|
| Orchard Foods plc ordinary shares | Equities | 1,200,000 | Clear |
| Bramwell Holdings plc ordinary shares | Equities | 160,000 | Tobacco |
| Lumen Telecom plc ordinary shares | Equities | 2,000,000 | Clear |
| Kestrel Utilities 5% 2031 | Corporate bonds | 1,500,000 | Clear |
| UK Treasury 3.25% 2033 | Government bonds | 2,500,000 | Clear |
| Cash | Cash | 640,000 | Not applicable |
| Group | Status | Value | Bounds | Headroom to the hard bound | Code |
|---|---|---|---|---|---|
| Ethical exclusions | Breach | 2% | – | – | EXCLUDED_HOLDING_PRESENT |
EXCLUDED_HOLDING_PRESENT: At least one holding matched the approved exclusion list.
Largest contributors: Ethical exclusions → Bramwell Holdings plc ordinary shares 2%
Computed at build time by the Acclimetry rule engine (backend commit 8197063); the same code runs in the product.
What each monitoring run records
Each run stores the state, the excluded holdings by name with their weight, and the source, dataset and as-of date of the screen. A clean result is recorded only when every holding carried a verdict. A breach opens a case, where divestment or a time-bound waiver naming the holding is recorded.