The Vegetarian Resource Group Blog

ETHICAL INVESTING

Posted on December 05, 2017 by The VRG Blog Editor

By Brenda A. Morris

Like generations of people before them, animal activists and advocates want to see their values reflected in their investments. Investors have avoided investments in alcohol, tobacco, and weapons makers for religious and ethical reasons for hundreds of years. In the 1980s some investors began to avoid companies doing business in what was then apartheid South Africa. This type of exclusionary investing is fairly straightforward: do not invest, or let money managers invest, your money in companies that participate in practices or industries that go against your values. While this sounds easy enough in theory, even people who agree that they do not want to invest in companies that harm, kill, or exploit animals have to decide where to draw this line.

If you’re not willing to support the meat industry by buying chicken and burgers, you should consider whether you’re doing so indirectly by purchasing shares of mutual funds that invest in companies that profit from their sales. While many socially responsible investment (SRI) funds won’t invest in companies that profit from adult entertainment, alcohol, firearms, gambling, nuclear power, predatory lending, tobacco, or weapons, nowhere is animal welfare mentioned. Some SRI mutual funds actually own millions of shares in businesses that profit from the killing and exploitation of animals. Although these funds may justify these holdings by arguing that the company in question has a diverse board or is reducing its use of plastic, I don’t agree that this warrants calling these businesses “ethical.”

While investing in individual securities—rather than mutual funds—gives investors more control over what’s in their portfolios, many individuals must use funds to be diversified, since money managers typically require a minimum of $100,000 (mutual funds, on the other hand, generally can be purchased with less than $100). I use this reality as an opportunity to have a dialogue with the fund families with whom we work, as well as with the businesses that are involved in the behavior that we, as animal advocates, find offensive. While my bar has been quite low for these funds over the years, the tides are beginning to turn as more investors demand more accountability.

On a handful of occasions over the past few years, I have discovered funds owning companies that most of us would agree are not only NOT SRI (forgive the double negative) but also downright UN-environmental. In these instances I have contacted the fund family to let them know that unless it was holding these shares for shareholder-advocacy reasons, we’d be selling our clients’ position. I also made my animal-friendly colleagues aware of this contradiction and shared this finding on social media. If a fund isn’t willing to budge, we’re able to replace it with another that has a similar investment style.

Cargill, one of the largest meat processors in the world, announced that it would sell off its feedlots and use the proceeds to invest in plant-based protein. I have to believe that Green Century, one of the fund families that my firm uses in many of our clients’ portfolios, is at least partially responsible for this milestone. Last year, Green Century presented a shareholder resolution to Tyson Foods asking that the company disclose the steps that it was taking to address the risks to its business from the increased popularity of plant-based eating. Green Century withdrew this resolution once Tyson made the announcement that it had invested in Beyond Meat. Tyson and Cargill are not making these moves to make their investors “feel good”—rather, they’re acknowledging the investment opportunities arising from plant-based enterprises.

When I initially met Steven Wallman (CEO and founder of Folio) back in November of 2016 at our annual SRI conference, I had no idea just how quickly and willing he would be to move forward on my suggestion to make factory farming security exclusions available to the public through our Folio platform. Lo and behold, less than 90 days after our accidental introduction grabbing soy milk for our coffee at the same time, Steve has already worked with Matthew Prescott from the Humane Society of the United States to make this happen.

What steps can you take to propel this movement forward? If you contribute to nonprofits or charitable organizations, remember to ask them how they’re investing the funds that aren’t being used in the immediate future. If you work for a company that offers a retirement plan, find out if it has any socially responsible investing (SRI) options and ask it to consider enhancing its selection if it doesn’t. Ask your financial adviser which mutual funds you own in your portfolio and find out if they’re considered SRI. If they are, take a moment to ask your portfolio manager if they acknowledge the plight of animals in their investment selection.

As more and more vegans look for better ways to invest for the future, the momentum to invest humanely continues to grow. We have a tremendous opportunity to make a difference by demanding accountability from the companies in which we invest. Since most of us need to invest, I encourage you to do so while making a difference at the same time.

Brenda A. Morris is an Investment Adviser Representative of First Affirmative Financial Network, LLC, a nationwide network of investment professionals specializing in socially and environmentally responsible investing.

As a vegan Certified Financial Planner, Brenda encourages everyone to consider “humane investing.” She has presented to animal activists around the county, including groups such as the Vegetarian Society of Richmond, the Sierra Club, the alumni of the College of William and Mary, Caryn Hartglass’ Responsible Eating and Living radio show, graduates of Victoria Moran’s Main Street Vegan Academy, Katrina Fox’s Vegan Business Media podcast, the D.C. Green Festival, the N.H. Veg Fest, PETA, Northrop Grumman’s Green Volunteer Group, Portland’s VegFest, and the NYC Green Festival. She is determined to raise the bar for funds that are purportedly “sustainable” and “ethical,” as she strongly believes that they should consider animal rights and animal welfare in their investment process.

Brenda A. Morris,CERTIFIED FINANCIAL PLANNER™
Humane Investing, LLC
www.humaneinvesting.com
brendaveggie@firstaffirmative.com

Brenda A. Morris, CFP® is an Investment Advisory Representative of First Affirmative Financial Network, LLC.

This is not personal investment advice, for which you should speak with your financial or tax advisor.

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