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How To Be Vegan With Your Money
There are several common steps taken when becoming vegan, the order of which isn’t always consistent. There’s the most important step of cutting out animal products from your diet, then cutting out animal skins and products from your wardrobe, then the researching and conscious avoiding of animal testing/animal suffering from beauty and hygiene products.
While there may be several other steps within and beyond that, there is one extremely important step too many vegans are completely taking for
granted – Investing.
Most Australians have their money or mortgages in some way linked to a ‘Big 4 Bank’, all of which invest in fossil fuels, from most to least invested in fossil fuels: Commonwealth, ANZ, NAB and Westpac – but there are plenty of others that also lend outside of the Big 4, so be aware.
( Source: www.marketforces.org.au/info/compare-bank-table/ ).
Beyond that, most of them (all except NAB) invest in nuclear and combative weapons manufacturers – most vegans would probably agree that the need for nuclear weapons isn’t very ethical (Source: www.dontbankonthebomb.com which seems to occasionally redirect to a Japanese car parts website called tealium.icu).
As many vegans and ethical investors clue onto these destructive practices by the big banks, we’ve started looking at making switches in favour of ‘ethical’ superannuations and ‘ethical’ banks. But don’t be fooled, your idea of ethical is not the same as current society and big businesses idea of ‘ethical’.
An ethical superannuation will often invest your money in a variety of businesses and ETF’s. An ETF is an Exchange Traded Fund, essentially it’s a fund listed on the stock exchange that invests in a bunch of other businesses.
Vegans were somewhat blessed in September of 2019 when the United States welcomed the very first ‘vegan’ ETF called VEGN, which seeks to track the Beyond Investing US Vegan Climate Index (VEGAN).
VEGAN screens large-cap US companies for a variety of ESG (Environmental, Social, Governance) considerations, primarily animal harm and exploitation, as well as fossil fuels, environmental damage, and human rights.
Through the Facebook group Australian Vegan Stock Investors, I got in touch with Claire Smith, the CEO of Beyond Investing and a key instigator of the VEGN ETF.
Why did you start the US VEGN ETF?
Smith: “I launched VEGN due to a lack of suitable investment products for vegans and environmentalists, having been myself frustrated with the lack of options to invest for my own long-term needs.”
Is there any likelihood of making more ETFs in other international markets?
Smith: “Yes, that is our intention, to both create different products based on other geographies and to make these products available to investors located in other markets.”
However brilliant and at the forefront of vegan investing the VEGN ETF is, even this ETF has its faults.
When looking at its Holdings, there’s nothing being directly invested inappropriately, which is a true credit to the most vegan ETF on the global market. However when you look beyond the direct investments, VEGN invests in businesses such as:
BlackRock Inc. (NYSE: BLK) – Which is an investment management company that is the second biggest investor in nuclear weapons manufacturers in the western world.
Bank New York Mellon Corp. (NYSE: BK) – Which is an investment management company that invests in Pfizer and Gilead Sciences (which both test on animals), Phillip Morris (smoking) and numerous other non-ethical businesses including fossil fuels.
T. Rowe Price Group Inc. (NASDAQ: TROW) – Which is an investment management firm offering funds which mostly include all kinds of unethical businesses from nuclear weapons (6th biggest investor in the west) to fossil fuels to animal agriculture.
Frankly, I gave up going through the investment management firms and have now made the presumption that there are none that offer strictly ethical investing.
When I asked Smith at Beyond Investing to justify VEGN’s holdings of these businesses, she had this to say:
Smith: “We exclude companies in this area depending on the extent of their reliance and/or support of excluded activities. Our analysis takes the total of these exposures and compares them to a market benchmark, excluding those whose exposures are excessive.”
This basically means that the US VEGN ETF does allow non-vegan & unethical indirect investments up until a certain point.
However, isn’t any indirect investing in non-vegan or unethical businesses excessive? I bring this up to hopefully encourage Beyond Investing to shift their ethical/vegan ETF investments out of a sector which it seems cannot currently be deemed ethical or vegan to any extent at this time in society and therefore the entire investment management industry should be excluded from VEGN’s portfolio.
As well as to point out to anyone looking at investing in vegan businesses, ethical superannuations, banks and ETFs to know that this is what the most vegan ETF in the world currently invests in and although they are doing a fabulous job paving the way of a vegan future, we all have a very long way to go.
Possibly the most vegan and ethical thing that you can do with your finances would be to keep your money in an ethical bank, such as Bank Australia (which is owned by its members – meaning everyone with an account gets a say). Then using excess wealth & time into putting together your own ethical/vegan stock portfolio by investing in businesses that you personally deem ethical & vegan and skipping the middlemen who are creating their own screens on your behalf (A screen is a guideline of what will not be invested in. ie. Fossil fuels, Gambling, Tobacco & Nuclear Weapons screens are some of the most common ethical screens).
If you’re looking into investing ethically, make sure you do so within your means and do plenty of your own research.
Keep in mind that what people say is almost always just an opinion, INCLUDING THIS ENTIRE ARTICLE!
See to it that you educate yourself and if you want, seek legitimate financial advice from a certified financial advisor.
As for resources, please consider signing up to Beyond Investing’s mailing list at beyondinvesting.com and consider joining some groups to help share information around, such as the Facebook group Australian Vegan Stock Investors at facebook.com/groups/AustralianVeganStockInvestors/ which I started as a place to share and talk about ethical and vegan stocks without the ridicule that I would often receive in other groups.
Author: Nick Topakas
Vegan Investor & Creator of the AVSI Facebook Group