Exclusion list

An exclusion list removes holdings for reasons other than return: tobacco, controversial weapons, thermal coal, sanctioned countries or conflicts with a charity’s purposes. It may name issuers directly or apply a rule, such as companies earning more than 10% of revenue from coal.

Charity Commission guidance (CC14) lets trustees avoid investments that conflict with their charity’s purposes, weighing the conflict against the financial effect. A UK pension scheme’s statement of investment principles must state the extent, if any, to which non-financial matters are taken into account.

Exclusions are usually applied from a vendor’s screening data, so the data source and its as-of date are part of the rule. Acclimetry’s exclusion screens breach on any excluded holding regardless of weight, and disclose unscreened weight. Example: one excluded holding of 400 in a 1,000 portfolio breaches at 40%.