Cruelty-Free Investing: Matching Your Investments With Your Values

Cruelty-free investing is consistent with our commitment to being caring consumers—people who act every day to make consumer choices that will not harm 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.

Cruelty-free investing means 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 through companies like Karner Blue Capital and Beyond Investing and resources like Cruelty Free Investing, each of us has more opportunities to invest wisely and compassionately after carefully reviewing our overall financial situation.

Individual Stocks

An important starting point is to identify companies that do and that don’t test cosmetics, toiletries, and other household products on animals. PETA maintains an exhaustive listing of these companies in our Beauty Without Bunnies database, where you can search by company and by product to find out if a company supports animal testing.

Most commonly, investors eliminate the companies that test products on animals from their portfolios. Alternatively, some investors choose to selectively invest in the companies that have agreed to ban testing on animals permanently.

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; 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.

Mutual Funds

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 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 that 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 cruelty to animals 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 variety 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 that you can look for to help ensure that you are making the best choices for your values and for animals. Review the following in a fund’s prospectus and other written materials:

• Primary Sectors
  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 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 pharmaceutical, health laboratory, food production, or other companies that exploit animals, this could very well indicate that the fund is including even more companies in its holdings that are using and exploiting animals.

Promoting Cruelty-Free Investing

Please clearly voice your commitment to aligning your investments with your values to your broker, your financial advisor, and 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 let them know 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.

Note: This page is provided for informational purposes only. PETA cannot offer financial or investment advice. Please consult with an experienced broker, financial advisor, and/or mutual fund company representative when making your investment decisions.