ESG Policy

Policy as at:


Scottish Oriental seeks to invest in quality companies, as defined by the strength of their management, financials and franchise. We are long-term investors and measure success over years, not quarters. As a result, we look for management teams that are well-aligned with minority investors and respect all stakeholders, both in good times and bad. The pursuit of immediate gains through short-sighted strategy and reckless conduct, or the exploitation of labour, tax loopholes, legislative arbitrage or the environment, runs contrary to our definition of quality.

To us, sustainability is not just a label, but a set of values by which we operate. FSSA, the manager of Scottish Oriental have been signatories to the Principles of Responsible Investment (PRI) since 2007 (we view it as a minimum standard) and are constantly striving to better understand how ESG and sustainability issues impact long-term investment performance.

We recognise that our investment activities can have an impact on society and the environment – and good governance is the foundation on which great companies are built. Over time, our understanding of the broader issues has improved; yet, we realise it is an incredibly complex subject and there is no single approach or path to prescribe to investors or companies – rather, it is the direction of travel that is more important.

For our detailed policies please visit

Investment process

As long-term investors, we are focused on identifying companies that are intelligently driving sustainable outcomes. We typically look for founders and management teams that have high governance standards and whose interests are well-aligned with minority shareholders. Strong franchises that have the ability to deliver sustainable and predictable returns, comfortably in excess of the cost of capital. For more detail please visit


Environmental factors

  • Air quality and pollution
  • Climate change
  • Energy use
  • Sustainability
  • Waste and conservation
  • Water management

Social factors

  • Community initiatives
  • Diversity & equal opportunity
  • Employee engagement
  • Health and safety
  • Labour and working conditions
  • Supply chain risks

Governance factors

  • Accountability and audit
  • Directors, experience and quality
  • Effective communications
  • Management functions
  • Remuneration
  • Risk management

Investments we avoid (exclusions)

Our approach to responsible investment includes a commitment to supporting and upholding the fundamental principles of human rights.

  • Climate change – We will not invest in companies that do not take their environmental impact seriously and those that we believe do take them seriously, we monitor their progress on an ongoing basis. Companies that do not make progress will be excluded.
  • Coal – We do not invest in companies with a materially large exposure to coal mining and impose a 10% revenue threshold.
  • Deforestation and biodiversity – We expect palm oil companies to adhere to the policies of the Roundtable on Sustainable Palm Oil (RSPO) and No Deforestation, No Peat, No Exploitation (NDPE). In addition we strongly encourage our consumer companies to adhere to these policies and if our engagement is unsuccessful we will sell our holding.
  • Nuclear energy – We do not invest in companies that derive revenue from the production of nuclear energy.
  • Gambling – We do not invest in companies whose primary business is gambling. We impose a 10% revenue threshold.
  • Weapons – We do not invest in companies that are involved in the production or development of cluster munitions, anti-personnel mines, small arms, biological weapons, chemical weapons or uranium munitions.
  • Pornography – We do not invest in companies involved in the production of pornography.
  • Tobacco – We do not invest in companies that are involved in the production of tobacco products and continue to engage with our banking exposure to encourage them to cease doing business with the tobacco industry.
  • Bribery – We do not invest in companies where there is believed to be systemic bribery. At a minimum we expect companies to adhere to Principle 10 of the UN Global Compact.
  • Tax – We believe that all companies should adhere to local taxes legislation in both the letter and the spirit of those laws. Those that do not are likely to face ether a regulatory or a consumer backlash or both. We will not invest in companies that persistently do not adhere to local tax legislation.

For more detail please visit