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Tuesday, December 1, 2020

US Vegan Climate ETF, the world’s first cruelty-free exchange-traded fund, is now a year old

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In 2019, Beyond Investing launched the first cruelty-free exchange-traded fund, the US Vegan Climate ETF, with the ticker ‘VEGN’, on the New York Stock Exchange.

One year ago Beyond Investing let advocates for animal rights and environmentalists to put their money where their mouths were by launching the US Vegan Climate ETF, with the ticker ‘VEGN’, on the NYSE.

In the year since, VEGN’s performance has seen a 27.69% return on market price, as opposed to the S&P 500’s 19.75% through to August 31, 2020. The ETF seeks to track Beyond Investing’s US Vegan Climate Index (VEGAN), which screens large-cap companies in the US for considerations including animal harm and exploitation, fossil fuels, environmental damage, and human rights.

VEGN looks to invest in companies that offer a humane approach (limiting its largest holdings to 5% of its total portfolio), are animal-friendly (avoiding companies involved in animal harm, screening, and testing), and are beneficial for the environment and humans (excluding companies involved with fossil fuels, defence, military and human rights abuses).

In a press release, Beyond Investing talks about how 2020 has been a year of change, and how Covid-19 has impacted people’s consumption habits. The UN noted a 6% drop in carbon emissions due to the coronavirus outbreak and its related travel bans. The International Energy Agency reported a drop in oil demand by 90,000 barrels per day, against its previous forecast of a global increase. The demand for dairy and meat products has also declined for the first time in nine years, while plant-based product sales boomed during the pandemic.

Claire Smith, CEO of Beyond Investing, believes these changes will be permanent: “Some of these will be enforced by continuing concerns about the infectiousness of Covid-19, as 100% vaccination will not be possible immediately. Unless we dramatically reduce our use of animals and invasion of natural landscapes, the next Covid is just around the corner.”

“Other changes that have occurred will continue naturally, because people find advantages from the perspective of quality of life; for example, remote working. This will have an impact on the level and scope of economic activity; it will be less focused on city centres and spread out into a wider area, possibly causing a regeneration of rural communities.”

She adds that we are in a transition period: “Hopefully, people will take advantage of this disruption to pause and consider what is worth retaining from our former lives and what can be accomplished in a healthier and more sustainable way in the future.”

The VEGAN index’s screening rules have driven the vegan ETF away from the sectors worst impacted by Covid-19. Beyond Investing says 31% of its outperformance was a result of avoiding companies involved in animal exploitation, 49% came from avoiding fossil fuel use and environmental damage, and 19% from excluding companies dealing with weapons manufacture.

VEGN has also had a lower carbon, waste and water footprint per revenue unit than the S&P and many other environmental, social, and governance (ESG) indices. The stocks in VEGN create only 5.04 tons of waste per $1 million of revenue, in comparison with the S&P’s 129.67 tons.

The vegan ETF’s assets have steadily grown to exceed $25 million within a year. What’s next for Beyond Investing? “We plan to continue to release investment products that enable investors to invest for a kinder, cleaner, healthier world,” says Smith. “Our immediate plans are to release a European version of our Vegan Climate Index, imposing the same rules on a European large- to mid-cap stock universe.”

She adds: “A dedicated vegan thematic portfolio in global small- to mid-caps has already been developed and will be available for investment soon. Our ultimate aim is to provide — either directly or via partnerships — cruelty-free and climate-friendly investment solutions to all investors in all asset classes.

Anay
Anay Mridul
Anay is a journalism graduate from City, University of London. He has been a barista for three years, and never shuts up about coffee. He's passionate about coffee, plant-based milk, cooking, eating, veganism, writing about all that, profiling people, and the Oxford Comma. Originally from India, he went vegan this year, after attempting (and failing) Veganuary. He believes being environmentally conscious is a basic responsibility, and veganism is the best thing you can do to battle climate change. He gets lost at Whole Foods sometimes.