Workers' rights top list of ethical investor concerns

London, 16 November: Ethical fund managers should favour companies that maintain high standards of working conditions in their supply chains, according to a survey of investors released this week.

UK investment management company Standard Life polled close to 1,200 of its ethical investors, asking them to rank the issues of most importance to them.

Workers' conditions topped the rankings, which also revealed that the environment was a major concern among investors. The provision of pollution control products or services, and the development and use renewable energy, were placed second and third in terms of importance.

Standard Life Investments manages approximately £130 billion ($245 billion) of assets, £425 million of which is ethically invested. It uses the survey to adapt its investment policy in line with investors' views on issues such as community involvement, employment policies, corporate governance, alcohol, gambling and animal testing.

The investors said fund managers should avoid investing in companies and countries with poor human rights records, companies involved in the arms trade, and those that are responsible for clearing tropical forests.

The survey also asked investors whether companies should be deemed to have failed ethical criteria when their 'unethical' activities ceased several years ago, and how many years was an acceptable time to wait before allowing such companies to be considered for ethical investment.

"Over 75% of respondents replied that three years after the activity stopped the company would be acceptable. We will use these results to consider how we might be able to apply ethical criteria in the future," said Julie McDowell, head of socially responsible investing research, and secretary of the Standard Life Investments' ethical committee.