Decision by investment house to exclude airline stocks from ethical funds angers IATA
Tue 12 Feb 2008 – The UK’s Standard Life Investments (SLI) has announced its ethical funds will no longer invest in airline stocks, following the results of an investor survey. The decision has brought condemnation from the International Air Transport Association (IATA), which represents 240 airlines.
SLI says the new policy is a direct result of feedback received in the Standard Life 2007 ethical investor survey in which 30% of respondents stated they would prefer a complete exclusion of airline stocks from the funds.
“The views of investors in our ethical fund range are of paramount importance to us,” commented Julie McDowell, Head of SRI. “We are unique in carrying out an annual survey to understand investor wishes and concerns and we seek, wherever possible, to reflect those concerns in the criteria applicable to our ethical funds.
“In light of the sizeable percentage of our investors wishing to avoid investment in airlines, the Standard Life Ethical Committee has decided that our ethical policy should be adopted to reflect these views. I am sure that investors welcome the fact that they play an important part in helping to shape our ethical fund criteria.”
Responding to the decision, IATA spokesman Anthony Concil said: “It is unfortunate that Standard Life’s ethical investors have chosen not to participate as shareholders in airlines, who collectively are driving the environment agenda by setting ambitious benchmarks for other industries to follow.
“The aviation industry has a vision for producing carbon emission-free technology in the next 50 years. In the short term we are working successfully to limit our 2% share of global CO2 emissions, ensuring we can continue to play a vital role in the world economy – supporting 32 million jobs and US$3 trillion worth of GDP.
“Additionally, I would also add, that our understanding is that 70% of those surveyed wished to invest in airlines with good track records…and only 30% suggested not investing entirely. The sector has a strong track record on environment and other issues…including its critical role in development and spreading wealth and opportunities around the globe. The decision is both surprising and difficult to understand.”
Standard Life Investments currently manages £588.5 million ($1.2bn) over its ethical range, which includes the UK Ethical, Ethical Corporate Bond, European Equity Ethical, Life Ethical and Pension Ethical funds.