Cruelty-free investing is consistent with our commitments to be caring consumers — people who act every day to make consumer choices that will not harm or abuse animals. As we take stands daily to fight animal abuse by purchasing cruelty-free products, we can also take steps to choose investments that do not cause or contribute to animal suffering.
Investing in companies and funds that do not exploit animals is an important way to support animal protection.
“Cruelty-free investing” is investing in companies, mutual funds, bonds, and other investment vehicles that do not support, cause, or contribute to animal exploitation and suffering, including the destruction of natural habitats.
With cruelty-free investing options becoming more available in the past few years, each of us has more opportunities to invest wisely and compassionately after carefully reviewing our overall financial situation. Please know that we applaud everything you can do to choose investments that will be good for both you and the animals.
An important starting point is to identify companies that do and that don’t test cosmetics, toiletries, and other house-hold products on animals. PETA maintains an exhaustive listing of these companies here. Also helpful are our biannual Cruelty-Free Pocket Shopping Guides, and the Shopping Guide for Caring Consumers.
Most commonly, investors eliminate the companies that test products on animals from their portfolios. Alternatively, others choose to selectively invest in the companies that have agreed to permanently ban testing on animals.
Please remember that one of the best “investments” you can make for animals is a gift to PETA. Perhaps consider “cleansing” your portfolio by donating your “bad” stocks to us, and we will apply the proceeds to important, lifesaving programs for animals.
Another good starting point is to research companies in specific sectors of the economy that you are interested in considering for your investments. Besides the companies conducting or sanctioning vivisection, please also remember to exclude companies that exploit animals or cause them suffering in other ways, such as companies that use animals in the process of creating food, clothing, or entertainment; destroy the environment; or otherwise contribute to the exploitation and suffering of animals. For example, exercise great caution before selecting companies in at least the following sectors of the economy: building and construction, chemicals, clothing and apparel, consumer products, energy, food and beverages, leisure and recreation, medical supplies, mining, oil, and pharmaceuticals.
Please keep in mind that mutual fund companies interpret “cruelty-free” and “socially responsible” investing in many different ways. It is critical that you review the specific screening guidelines (i.e., guidelines used to “screen” out companies that exploit animals) of each fund. Regardless of what you are told by mutual fund company representatives by phone, ask for written information (including a prospectus) that clearly spells out the fund’s screening or other investing guidelines.
Once you review the written guidelines, it’s also important to look at the primary sectors of the economy each fund invests in, as well as carefully reviewing each fund’s top holdings. Some funds may have commendable written guidelines but use loopholes (in broad language) to actually invest in companies that harm large numbers of animals. Other funds have vaguely written guidelines, but in practice, they screen their investments carefully and in good faith to their objectives.
Some animal protection supporters choose to invest in socially responsible environmental funds. As shareholders, they then urge the fund companies to expand their screening to include direct screens against animal cruelty as well.
Special Sector Funds
You can also avoid investing in companies that exploit animals by choosing specialized funds that focus exclusively on particular sectors of the economy that do not generally involve the exploitation of animals.
This approach actually allows for a vast selection of choices, from the wide range of technology funds to funds focused primarily in financial services (banks and brokerages) and telecommunications.
Most of the largest, well-known mutual fund companies now offer some specialized funds, thereby allowing you to concentrate part of your portfolio in a wide range of companies within your preferred sectors of the economy. Ask the mutual fund companies that you are considering for specific information on sector fund choices that they offer.
Tips for Examining Mutual Funds
Even without cruelty-free investment screening or specialized sector investing, it’s possible to find well-rated and well-performing funds that invest in multiple sectors of the economy that do not involve animal exploitation.
For instance, if your employer offers you a list of funds to choose from for your 401(k) plan or other retirement plan, there are still things you can look for to help ensure that you are making the best choices for your values and for the animals. Review the following in a fund’s prospectus and other written materials:
Review the sectors of the economy in which each fund concentrates the majority of its investments.
Top 10 Holdings
At the very least, review the fund’s top 10 holdings (i.e., the top 10 companies that the fund invests in). If you’re unfamiliar with one or more of the companies listed, please research them (on www.morningstar.com or through another reputable financial investment source) and learn what business they are engaged in. If you find one or more companies on the list that are pharmaceuticals, health laboratories, food production companies, or other companies that exploit animals, this could very well indicate the fund is including even more companies in its holdings that are using and exploiting animals.
Allocation of Assets
Review what percentage of the fund’s holdings are in stocks, bonds, cash, or other types of securities.
For a solid overview of a fund, don’t forget to study the following also: performance (the historical rate of return), fees, minimum initial investment requirements, minimum subsequent contributions, the category and strategy of the fund (growth vs. income, large-cap vs. mid-cap or small-cap companies), and assets (the total size of the fund’s holdings).
Promoting Ethical Investing
Please clearly voice your commitment to aligning your investments with your values to your broker, to your financial advisor, and to mutual fund company representatives. Future options in large part depend on our ability to convince the financial services industry that there is a very strong demand for strict cruelty-free investing opportunities. For example, don’t hesitate to write, call, fax, or e-mail company representatives and notify them why you are, or are not, considering their company’s funds. You can also let mutual fund companies know that you would be willing to invest more in their funds if they tightened their screening requirements and expanded the types of cruelty covered in their screens. Similarly, by explaining your concerns for animals and describing the types of companies that you want to exclude from your portfolio, there’s a good chance that you will be educating your broker or advisor so that he or she will be able to help guide those who follow in your footsteps.