Impact investment: Market gets its teeth into vegan ETF

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By:
Helen Avery
Published on:

Founders claim existing meat-production business model at risk from stranded assets as interest in meat-free diet grows.

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Beyond Investing is launching what is thought to be the first dedicated vegan climate exchange-traded fund (ETF) in January.

It follows the launch of the US Vegan Climate Index by the vegan and cruelty-free investment group in June this year.

According to research firm GlobalData, the number of vegans in the US has increased 600% in three years to 6% of the population. In the UK, the number of vegans has risen 700% in two years, according to comparethemarket.com, while in Germany the percentage of the population following a low-meat diet has risen to 44% from 26% in 2014.

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Claire Smith,
Beyond Investing

Beyond’s founder and CEO Claire Smith says: “There’s a societal shift taking place towards veganism, or at least reducing the consumption of meat because of concerns about health, the environment or animal cruelty.”

Indeed, given the shift, Smith says it is surprising that the UN Sustainable Development Goals have no mention of animal farming, given the environmental impact of farming.

“There are widely disparate numbers, but research seems to point to the fact that the majority of greenhouse gas is produced as a result of animal agriculture – predominantly because of the loss of the carbon sink when land is cleared,” she says.

“And much of animal agriculture involves chemicals that are also environmentally damaging, not to mention damaging to health.”

According to research by the Weizmann Institute of Science in Israel, farmed poultry today makes up 70% of all birds on the planet, with just 30% being wild. It also states that of all mammals on Earth, 60% are livestock – mostly cattle and pigs – 36% are human and just 4% are wild animals.

Negative impact

During the past month alone, three reports have driven home how this activity is negatively impacting the planet. Among the reports was research from the University of Oxford claiming the world will have to eat 75% less beef, 90% less pork and half the number of eggs if we hope to keep climate change below 2 degrees Celsius.

“Without concerted action, we found that the environmental impacts of the food system could increase by 50% to 90% by 2050 as a result of population growth and the rise of diets high in fats, sugars and meat,” states Marco Springmann, who headed up the research.

“In that case, all planetary boundaries related to food production would be surpassed, some of them by more than twofold.”


It’s important to us to be about reducing the problems and also helping fund the solutions 
 - Claire Smith, Beyond Investing

Springmann is also suggesting a red-meat tax in countries such as the UK.

The World Wild Fund for Nature also released a report stating that global wildlife populations have fallen by 60% in just over four decades.

“It’s not that our vegan ETF can solve these issues, but it can help people better align their capital with their values and also highlights what sectors of industry need to be reconsidered for a planet supportive of all species,” says Smith.

The ETF tracks the recently launched index, which screens for companies that do not engage in animal farming or animal testing among other criteria. Midcap companies that support a vegan and carbon-reduced lifestyle are added to the index.

Alternatives

Separately, Beyond Investing also has a venture capital vehicle that invests in alternative proteins and alternatives to dairy and eggs.

“It’s important to us to be about reducing the problems and also helping fund the solutions,” says Smith.

It’s not just about values but about mitigating risk within an investment portfolio, she adds, pointing out that more vegan-inspired investment opportunities are likely to emerge.

“More of the traditional offenders in this space have their venture arms looking into alternatives to meat,” says Smith. “Some meat distributors, for example, are putting money into clean-meat start-ups. They are aware their own business model is in danger of collapsing if they don’t. They have huge amounts of money invested in assets like enormous factory farm feedlots and yet fewer people are eating meat.

“They run a real risk of being landed with stranded assets, and investors are becoming more aware of this.”


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