US fund manager Beyond Investing will launch the US Vegan Climate ETF (VEGN) on 10 September on the New York Stock Stock Exchange, in response to what it says is growing demand to find investments that meet criteria of vegan investors.
The strategy is based on tracking the US Vegan Climate index, which was launched by Beyond Investing in June 2018. This index uses the Solactive US Large Cap index, and filters out businesses that are deemed incompatible with a vegan and climate concious approach to investing. Stocks that are excluded are replaced with mid cap alternatives that meet the criteria.
The strategy seeks to avoid investing in companies with business models that rely on "animal exploitation - predominantly testing and animal-derived products - as well as removing fossil fuel and environmental threats such as plastic and agrochemicals, which are harmful to wild animals."
Compared to the Solactive index, the manager claims its Vegan Climate index offers 61% less carbon, 89% less waste and 83% less water, as calculated on 30 June 2018 by Impact Cubed.
The fund will not, however, be immediately available to investors in the EU. Beyond Investing cites the Packaged Retail Investment and Insurance-Based Products Regulation (Priips), which it says has "caused US ETFs to be removed from brokerage platforms for retail investors."
"To remedy this, Beyond Investors is currently designing and EU-acceptable structure."
Claire Smith, CEO, said: "Our aim is to help vegans and animal activists take the pain out of their portfolios. So many compassionate people go to great efforts to avoid buying products that contain animal ingredients or have been subject to cruel testing, but when it comes to their investment options, they're actively, albeit often unwittingly, supporting companies and industries that exploit and torture animals. Our ETF offers them the opportunity to invest in line with their values. And because we love humans as much as other animals, we have defense and human rights screens as well."
"It requires a lot of detailed work to ensure that all relevant information is collected and analyzed. Plus we're building the index in a robust fashion and providing impact metrics, which demonstrate its social and environmental benefits. These are just some of the ways in which Beyond Investing seeks to differentiate itself from other providers. Once the ETF is launched, we plan to engage with companies to encourage them to make their business practices to be more animal-friendly, by removing animal products from their business lines and improving their services to vegans."