Thursday, January 24, 2013

Ethical vegans - to invest vegan or not?

To the ethical vegan, the question of whether to invest vegan may seem obvious on the surface. To a person who is vegan because they think it's not fair to cage and/or kill innocent animals unnecessarily, certainly being responsible for the caging and killing indirectly as a shareholder is a violation of principle.

To somebody with an understanding of financial markets, however, it might not be so simple. That's because if a group of people chooses not to invest in a class of companies, share prices in those companies will, all other things equal, tend to go down. As the share prices go down, the returns become more attractive until somebody else picks up the investments. This is an effect similar to that seen in vice industry investing, which has been rather lucrative financially over the years.

So there's an argument for keeping animal companies in your portfolio and ending the cycle on the demand side -- namely, reap the profits from animal suffering but refuse to create any further demand for it yourself.

On the other hand, in addition to wanting to have "clean hands," you may find that vegan investing is a nice way to align your interests with the future that you desire, and also a nice way to make a statement of your values.

In my opinion, both sides of this argument have good points and neither is wrong per se.

In his excellent book The World Peace Diet, Will Tuttle puts forth a great case for how, once we have begun to see the truth of animal exploitation, we have a responsibility to step up and make it stop happening. When faced with an investment decision, you are responsible for what your money is enabling. The question then becomes, which choice can you live most comfortably with?

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