Responsible Investing at Common Interests

Our Philosophy & Our Process

Beyond the Financials

At Common Interests, we start our investment process in the same place as the rest of the industry: with the fundamentals of the companies we invest in. We look at balance sheets, P/E ratios, and the rest of each company’s financial statistics. The difference comes when we overlay our values system on the investments we choose. This extra layer of risk management is the core of our practice and an extension of who we are as people.

We view long term investing as casting a vote, and for the core of our portfolios, we refuse to cast that vote for companies that are messing up our planet, treating their people in ways we wouldn’t want to be treated, or “cooking the books”. The generic way we describe our screening process is ESG, Environmental, Societal, and Governance.

Negative Screens

As Responsible Investors, we believe that the first rule of investing is “first, do no harm”. To follow this mantra, the core of our portfolios employ Exclusionary Screens in an attempt to avoid investing in companies that:

Demonstrate poor environmental performance or compliance records or contribute significantly to local or global environmental problems.
Are the subjects of serious labor-related actions or penalties by regulatory agencies or demonstrate a pattern of employing forced, compulsory or child labor.
Exhibit a pattern and practice of human rights violations or are in directly complicit in human rights violations committed by governments or security forces, including those that are under U.S. or international sanction for grave human rights abuses, such as genocide and forced labor.
Exhibit a pattern and practice of violating the rights and protections of Indigenous Peoples.
Demonstrate poor corporate governance or engage in harmful or unethical business practices.
Manufacture tobacco products.
Have significant and direct involvement in the manufacture of alcoholic beverages or gambling operations.
Manufacture or sell firearms and/or ammunition.
Manufacture, design, or sell weapons or the critical components of weapons that violate international humanitarian law; or manufacture, design, or sell inherently offensive weapons, as defined by the Treaty on Conventional Armed Forces in Europe and the U.N. Register on Conventional Arms, or the munitions designed for use in such inherently offensive weapons.
Abuse animals, cause unnecessary suffering and death of animals, or whose operations involve the exploitation or mistreatment of animals.
Develop genetically-modified organisms for environmental release without countervailing social benefits such as demonstrating leadership in promoting safety, protection of Indigenous Peoples’ rights, the interests of organic farmers and the interests of developing countries generally.

Positive Screens

It’s not just about avoiding the bad actors, we also seek to find those companies that have sustainability baked into their culture. We generally seek to invest in companies that excel in the following areas:

Business Practices and Corporate Governance

are responsive to consumer and public concerns, and market their products responsibly;
demonstrate “best practices” related to board independence and elections, auditor independence, executive compensation, voting rights and other important governance issues;
have strong records of compliance and do not have a pattern of regulatory violations for their products or services; and
provide beneficial and useful products and services.

Diversity

promote equal opportunity and actively recruit, hire and promote individuals in order to create a diverse workforce; and
do not have a pattern of discrimination based on age, gender, religion, race, disability or sexual orientation.

Labor

do not have a pattern of labor law violations or engage in unfair labor practices;
do not have poor health and safety records or consistent patterns of OSHA violations;
offer competitive salaries and benefits, have family-friendly policies and good relationships with unions.

Community

engage with the communities in which they operate;
take a proactive approach to minimizing their negative impact; and
support their local and/or global communities, either through financial support or by encouraging employee volunteerism.

Environment

have exceptional environmental policies, management systems, and performance;
meet or exceed industry standards; and
take a proactive stance with environmental initiatives.

Supply Chain

have vendor policies that include a code of conduct; and
apply environmental, health, safety and diversity criteria in supplier selection.

Human Rights

do not permit the use of child labor, forced labor or other abuses in the manufacture of their products; and
enforce codes of conduct and vendor standards for their sub-contractors, operations and suppliers.