Veganism is more popular than ever as conscious consumers choose to eschew meat and dairy for environmental, religious and ethical reasons.
But now, fund advisors are calling on investors to apply their ethical sensibilities to their investments, with the launch of the first vegan exchange-traded fund (ETF).
French advisors, Beyond Advisors have registered with the US Securities and Exchange Commission to begin trading their US Vegan Climate ETF.
ETFs are investment funds which can be bought and sold on securities exchange markets and are generally considered passive investments as they track an index.
According to the fund’s prospectus, the ETF aims to offer vegans, animal lovers and environmentalists a way to invest without supporting “companies whose activities directly contribute to animal suffering, destruction of the natural environment and climate change”.
The fund will track an index built by screening out companies from the Solactive US Large Cap Index which indirectly or directly harm animals. This cuts out about 40 per cent of the market capitalisation of the benchmark.
“With reports suggesting 6 per cent of the US population identify as vegan, Beyond Advisors anticipates demand for financial products based on this index to serve the requirements of vegans and environmentalists who do not want their money supporting businesses whose activities they oppose,” Beyond Advisors investment analyst Claire Smith said.
“Extraction and burning of fossil fuels is a leading contribution to environmental pollution and climate change, which is as damaging to animals as it is to humans,” she continued.
“Animal agriculture is the leading cause of species extinction, ocean dead zones, water pollution, and habitat destruction, as well as also contributing to climate change through greenhouse gas emissions.”
Beyond Advisors said investors who use the US Vegan Climate Index, which the ETF tracks, will avoid “funding the slaughter of 13 animals a year for every $1,000 invested”.
The US Vegan Climate Index also demonstrates improved carbon emissions, water utilisation and waste product metrics.
However, investors are looking at a 6 per cent management fee – or US$6 for every US$1,000 invested.
Closer to home, BetaShares Global Sustainability Leaders ETF offers investors exposure to 100 large global stocks which are “climate change leaders” and which are “not materially engaged in activities deemed inconsistent with responsible investment considerations”.
This fund made headlines after it removed Facebook from the index it was tracking given the social media giant’s “controversies and reputational issues.”