Investors can avoid companies that exploit or harm animals and still make money, says a vegan investing leader.
“It’s getting quite a hot zone, and rightly so because the size of the markets is huge,” Beyond Animal co-founder Claire Smith said Friday.
The former investment banker turned “angel investor” has been a vegan/vegetarian since she was 15 years old and created the world’s first comprehensive vegan investment platform a few years ago.
“We invest for humanity – for humanity as in humans, but also for the other meaning of the word humanity, which is to be human,” she said.
The Swiss-based digital platform has signed more than 500 deals, signed nearly 4,000 companies and hosts dozens of online events that connect serious businesses with capital.
She says some people think vegan wallets are just “well, you buy Beyond Meat or you buy another plant-based company.”
“That’s definitely part of it. We have portfolios that do that,” she said at an online event organized by the international network Women in Sustainable Finance.
“But the key element of the philosophy of veganism is to avoid animal exploitation.”
Companies are excluded during a detailed analysis of all product lines and supply chains.
The contribution of animal agriculture to climate change is a key consideration, including growth and feeding, transport and processing.
The entrepreneur said understanding the risk of factory farms, antibiotic resistance and the pandemic was also on the radar of investment banks, which were beginning to use this analysis to reduce their risk.
Conservative global estimates show that there are more than 10 billion laying hens, 400 million dairy cows and 175 million animals used for testing.
“Chickens and mice are under great pressure in terms of animals slaughtered and also in terms of animals tested,” she said.
“Just being here and being a vegan, it’s a big deal to me that there’s so much slaughter and harm to animals.
“But also, it significantly undermines our ability as humans to achieve many of the (sustainable development) goals that have been proposed as targets for human society.”
It’s not just about human consumption. Rather, it is about how animals are used in product creation, product testing, and research.
Rather than using 10% of all leather in the world to make car seats, manufacturers could consider animal-free alternatives, some of which are made from recycled food waste such as vegetable or fruit skins.
Its portfolio also includes cultured meat, food technology companies creating protein molecules and others producing ingredients.
“The key aspect here is to create alternatives to animal products that are superior in many ways, in taste and texture.”
She said these companies also produce ingredients that giants such as Nestlé, Unilever or General Mills use in their own products.
“They’ve got the consumer side of things wrapped up. They’ve got huge distribution. They’re in supermarkets.”
Globally, there was a US$1.5 trillion (A$2.1 trillion) market for animal protein, a US$3 trillion market for foodservice and $3 trillion US for packaged food, she said.
Alternative materials for plant-based clothing are being developed for the clothing industry, not for fast fashion but for more sustainable clothing.
There is also a massive market for personal care products, which are becoming safer, more natural, and less likely to be tested on animals.
But she says the $25 billion market currently involved in animal testing should be replaced by more precise, human-friendly cell versions of testing devices.
“This is an area of scientific progress, which is extremely exciting and will yield much better results in terms of drug development.”
She says Beyond Animal is creating products as quickly as possible to allow people to build comprehensive retirement portfolios that fit this theme.
There is also a house option.
The vegan investor noted Cruelty Free Super as Australia’s first superannuation fund that does not exploit or harm animals.
The ethical super fund screens cosmetic testing, factory farming, animals in sports and entertainment businesses.
Fossil fuels, nuclear energy, pollution, environmental destruction are also excluded, as are companies that harm people by using forced labor or running detention centers.
If there is buying interest in ethical companies, it helps them attract capital and become the biggest companies traditional investors need to own.
Asked about performance, Ms Smith said animal-friendly businesses would perform better.
“That’s my hope and my expectation.”
She said the vegan index had outperformed the US benchmark S&P 500 index since 2019.
“If you’re managing a portfolio, you definitely need to be very aware of this trend and how it could pose a threat to existing portfolio holdings,” she said.
“They have high efficiency because you’re not using the inefficient animal-based production system and they have the potential to scale.”
They also won’t face the same legal issues and carbon charges around greenhouse gas emissions, she says.
“Startups are very nimble in this space and they can access capital.”
She expected incumbents to be threatened by changing consumption patterns and technological advances.
“What we are doing is replacing an existing market for animal products.”
Australian Associated Press