ASA Adjudication on Jupiter Investment Management Group Ltd

Ad

Two brochures, for investment portfolios:

a. The first brochure was entitled "Unit Trust Factsheets" and described a number of funds on offer. Under the heading "Jupiter Ecology Fund", text stated "The objective of the Fund is to achieve long-term capital appreciation together with a growing income consistent with a policy of protecting the environment. The Fund's investment policy is to invest worldwide in companies which demonstrate a positive commitment to the long-term protection of the environment ... The Fund is considered dark green, in that there are rigorous ethical exclusions on the companies Charlie can invest in, while actively focusing on six green investment themes: clean energy; water management; green transport; waste management; sustainable living; and environmental services ..."

b. The second brochure was a Monthly Factsheet entitled "Jupiter Climate Change Solutions". Under the heading "Fund Manager Style", text stated "The Fund will invest in companies providing profitable solutions to environmental and social problems including a significant focus on environmental and/or climate change solutions using the six green investment themes …”. The factsheet continued by listing the six themes detailed in brochure (a).

Issue

The complainant challenged the claims for the environmental credentials of both Funds, because he understood they invested in meat production and the incineration of standard urban rubbish, both of which he believed contradicted the claims that the Funds were "dark green" investments.

CAP Code (Edition 11)

Response

Jupiter Investment Management Group (Jupiter) said they had used the claim "dark green" in relation to their Jupiter Ecology Fund because, in their view, that Fund met the industry definition of dark green. They asserted that the Fund was often cited as an example of a dark green fund in independent reports and commentary. They also pointed out that their brochure did not refer to the Jupiter Climate Change Solutions fund as dark green at any point.

Jupiter said the terms "light green" and "dark green" had been used within the financial services industry for many years. They sent extracts from articles which described the terms. Dark green funds were described as those that had the strictest ethical criteria and often excluded investments in large UK companies and the oil and gas industries. They also sent a review of the Jupiter Ecology Fund from smartplanet.com, an independent website, which described the fund as dark green but also stated that "although the Ecology Fund is considered to be among the darkest green of investment funds, radical purists may still be disappointed by some of the companies listed". They also referred to a comment from an Independent Financial Advisor which stated that the environment was only one issue among many and that other issues, such as armaments, also had to be considered in Socially Responsible Investment (SRI) funds.

Jupiter said the Jupiter Ecology Fund was launched in April 1988 and was one of the first ethical investment funds and one of the first with an emphasis on the environmental performance of companies. They sent details of three companies that they invested in which were involved in meat production or waste management; they said all three met the criteria of the funds in question.

Jupiter said they had one company in their portfolio that was directly involved in meat production. They said they had screened that company and they were happy that it did not breach the ethical criteria for any of their SRI funds. They said the company was not involved in any of their negatively screened activities, namely: nuclear power, alcoholic drinks, tobacco, pornography, armaments or gambling; they said it was also not involved in the testing of animals for cosmetic and toiletry purposes. They said the company produced high welfare and organic pork products and addressed its environmental impacts; the company had a policy of reducing CO2 emissions and energy consumption, optimisation of the use of transport and a recycling scheme.

Jupiter said they invested in a US based company that was involved in incineration, or the conversion of waste to energy. They said that company was not involved in any of their negatively screened activities but fitted in with their waste management theme because it provided solutions which they believed were recognised as a sustainable alternative to the disposal of waste to landfill. Jupiter said the company generated energy from waste which had been classified as a renewable energy source by the Department of Energy in the US. They said the European Waste Framework Directive recognised energy from waste as a recovery in the waste hierarchy and the Global Roundtable on Climate Change supported the use of energy from waste to help mitigate global warming.

Jupiter said they also invested in a company that was involved in the incineration of medical waste, which used high temperature and pressure to kill pathogens and had its own electro-thermal-deactivation process to treat medical waste; they said the company was not involved in urban waste collection or treatment. Jupiter said that company was not involved in any of their negatively screened activities but fitted in with their waste management theme because the company provided solutions that were recognised as a responsible and advanced way to treat medical waste and reduced the need for incineration.

Assessment

Not upheld

The ASA noted Jupiters Ecology fund had been referred to as dark green by several independent parties. We also understood that the definition of dark green in the industry generally referred to funds that did not invest in large companies or industries such as oil, pharmaceuticals and banks, and included those companies that wanted to get rid of certain practices they considered to be undesirable. We understood that environmental issues were not the only issues taken into account with dark green funds and that other ethical issues, such as large bonuses, armaments and animal welfare, could also be taken into consideration.

We noted ad (a) stated that the Ecology fund was considered dark green because ... there are rigorous ethical exclusions on the companies Charlie can invest in, while actively focusing on six green investment themes ...". We also noted ad (b) did not state that the Jupiter Climate Change Solutions fund was dark green but that "The Fund will invest in companies providing profitable solutions to environmental and social problems including a significant focus on environmental and/or climate change solutions using the six green investment themes ...". We considered that the ads made clear the types of company they invested in and their basis for selecting them. We understood that Jupiter screened all companies before investing in them to decide whether they met their criteria.

We noted Jupiter had sent details of three companies about which they believed the complainant could be concerned about. We noted those three companies had all been screened by Jupiter and fitted in with their criteria.

We noted the complainant was concerned about some of the companies Jupiter invested in, but we considered that readers would understand that the companies such funds invested in were involved in a wide range of industries with varying degrees of involvement with environmental issues, and that peoples opinion on the suitability of those issues would be different. We noted the ads gave details of the companies the funds invested in and considered that, before investing, people were likely to research the companies invested in and, if they believed it was an issue that affected them, could decide not to invest. We concluded that the ads were unlikely to materially mislead readers about the credentials of the funds.

We investigated the ads under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 49.1, 49.2 and 49.3 (Environmental claims) but did not find them in breach.

Action

No further action necessary.

Adjudication of the ASA Council (Non-broadcast)