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Investing in vegan … how to put your money where your mouth is

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Whether it’s your local pub finally adding an option to its menu for the first time or a plant-based version of your favourite dessert hitting supermarket shelves, the availability of vegan food has come on leaps and bounds in recent years.

The number of vegans in the UK quadrupled between 2014 and 2019, with 600,000 people putting themselves in that category, according to data from the Vegan Society. Veganuary, the campaign in which people go vegan for the month of January, reached a record 585,000 sign-ups this year, compared with only 3,300 in 2014.

There’s cash in the trend: the global plant-based meat market alone was predicted to grow from $3.6bn (£2.6bn) in 2020 to $4.2bn by 2021, according to the market research group Markets and Markets. However, for individuals who want to put their money where their mouth is, the options are not always obvious.

Applying vegan principles to investments can involve a lot of research

Which is unfortunate because Claire Smith, the chief executive of Beyond Investing, a vegan investment platform, and the creator of the US Vegan Climate Index, says they are generally socially and environmentally aware and are likely to be interested in what happens to their cash. “If they’re looking at labels and checking that the food they eat is definitely not coming from an animal, they’re likely to be concerned about where their money is going,” she says.

Applying vegan principles – such as avoiding companies that test on animals or exploit animals – to investments can involve a lot of research and will limit the number of companies you can invest in. Lee Coates, an ethical money and environmental, social and corporate governance consultant, who has spent years researching the best funds for vegans to invest in, says they “don’t have a lot of choice”.

In the UK there’s no dedicated fund to just stash your money in, and information on where to invest is hard to come by.

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“The best approach is to look for ethical fund solutions which screen out exposure to a wide range of issues, such as animal testing,” says David Henry, an investment manager at Quilter Cheviot. “It is worth speaking to a financial adviser with access to fund-screening tools to ensure your investment choices align with your objectives and your ethics.”

You can use an investment platform such as Fidelity, AJ Bell or Hargreaves Lansdown to buy these funds. However, you will need to check the individual holdings within the fund to see if they comply with your principles.

Coates says: “For example, you could look at buying a pure windfarm fund and think that’s not only eco but vegan, but you’d have to look at whether there’s subsidiaries for allow grazing on the hillside, which could then mean it’s rented to a local farmer to generate profits.”

Tech funds may seem a safer option but he says you “would need to look at their sourcing policies and if they undertake animal testing”. He adds that property can be good as “generally it’s ethically neutral”.

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Coates recommends the Janus Henderson Global Sustainable Equity Fund, which invests in companies contributing to positive environmental or social change and is “financially very successful and meets vegan criteria”. He also suggests the Aegon Ethical Equity Fund and the Aegon Ethical Corporate Bond, which he says stick to vegan principles – “for example, no factory farming, no retailing of meat and dairy”.

Alternatively, you could also invest directly through the stock market, choosing cruelty-free companies or pure vegan companies. Many of these are listed on stock markets outside the UK – such as Beyond Meat, the maker of the Beyond Burger, Else Nutrition, an Israeli producer of plant-based baby formula, or the US plant-based food producer Tattooed Chef.

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View image in fullscreenHaz Feliks from Aylesbury has ‘mainly been investing in technology companies, avoiding any company that operates in or is associated with animal agriculture’. Photograph: Haz Feliks

Haz Feliks, 40, a technology enhanced learning manager living in Aylesbury, invests in individual company shares via his lifetime Isa, his pension and a personal trading account. “Much like my everyday and grocery purchases, it’s important to me that I make ethical choices with my investments and savings,” he says. “Working in tech and being a tech enthusiast, I have mainly been investing in technology companies, avoiding any company that operates in or is associated with animal agriculture.” He invested in Tesla early on and currently invests in Beyond Meat and other companies “that meet the criteria of being plant-based or technology-based”.

A vegan for the past four years and the founder of the specialist breakfast delivery business Oatsu, Lauren O’Donnell, 28, invests between £25 and £50 a month in ethical funds and also holds shares in Beyond Meat and Oatly. “I try to focus on companies that have been focused on a plant-based solution,” O’Donnell says. “There’s particularly so much choice around food at the moment and, to an extent, clothing but with investments there could be more resources to make it easier for investors who want to make more sustainable and ethical-focused choices.”

Another option is to invest in vegan companies through crowdsourcing equity platforms such as Seedrs and Crowdcube. So far this year, Seedrs says 42 businesses with a plant-based focus have used its platform, up 400% on the previous year. One is the vegan chef-to-customer delivery service Allplants, which raised £4.5m. Crowdcube reports that more than 4,000 retail investors have committed almost £6m to vegan businesses on its platform this year.

Stephanie Peritore, 46, the founder and managing director of Mindful Bites, invests in vegan companies through her Isa and via crowdfunding.

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“It gives me access to deal flows to some phenomenal companies such as Pip & Nut. I’ve invested in about 25 companies and tend to invest around £20,000 each time.”

View image in fullscreenMany cruelty-free or pure vegan companies are listed on stock markets outside the UK, such as Beyond Meat, the maker of the Beyond Burger. Photograph: Steve Helber/AP

Most people’s biggest investment is their pension, and you might find that your workplace pension is far from vegan. “If you have been automatically enrolled on to a workplace pension, then you’ll likely be invested in the default fund option,” Henry says. “It’s worth seeing if the pension scheme has an ethical or sustainable fund option for you to invest in instead. While it’s unlikely these funds will invest solely on vegan grounds, they may exclude certain companies. For example, Nest’s ethical fund will avoid investing in companies that test cosmetics on animals and will only invest in companies that meet animal welfare codes of practice.”

Coates refers to a landmark ruling in 2020 where ethical veganism was deemed a philosophical belief and opened the door for people to have a right to vegan-friendly pensions. “A good employer would understand if you want a vegan pension,” Coates says. “Have a word with your boss. Group together with other vegan employees.” He recommends the Aegon Ethical Equity Fund as a pension – whether you are in a workplace pension or self-employed. Otherwise – and one for the self-employed – it might be best to open a self-invested personal pension, so you can pick the funds yourself.