A Female Perspective on Sustainable Investing
Without wanting to dismiss men and their interest in sustainable investing, it seems to me that women have an inherently greater attention to the topic, given their physical role in bringing into existence the next generation of humans. This was something that I deeply felt as I prepared to give birth to my daughter. One becomes acutely conscious of environmental pollution, which as it enters your bloodstream, necessarily reaches the body of your as yet unborn child. One becomes more careful about the food that you eat, realising that you are not only sustaining your own body, but that you are literally building another human’s body from within. You begin to realise that your child’s ability to live, thrive and survive in the world to come depends on the myriad of decisions that other human beings are making on a daily basis, as consumers, citizens or providers and users of capital, which have an impact on the natural world and its ability to sustain us in the future.
After my daughter was born, I felt an even greater empathy towards the females of other species, and in particular mammals, since we shared the same instincts to nurture our newborns. Having been a vegetarian for many years, I had always been anxious that my food should not be the cause of any animal suffering. But as a nursing mother I could no longer ignore or tolerate the harm that dairy and egg production does to hens, cows, sheep or goats, whose reproductive processes are exploited for the essential food they provide to their babies, deviated to nourish humans, with their young seen as unnecessary byproducts.
Sustainability also means sustainable for humans, not just for the environment. While pregnant, I also got involved in a local environmental group that was protesting the roll-out of genetically modified crops in the UK. Besides the unleashing of potentially hazardous, untested materials, it became evident that a primary motivation for the genetic modification of crops was to allow even more poisons to be sprayed onto crops. Leaving aside the damage to human health of higher concentrations of chemicals in food, this was also affecting soil health, thus creating a more reliable stream of cash to agrochemicals companies. Furthermore, as well as the greater quantities of chemicals sold, the GM crops did not produce viable seeds, leaving the farmers reliant on purchasing seeds year after year. Similar situations of dependence exist in the business of breeding and rearing of animals, where farmers are under contract to large meat producers and beholden to them for their supply and repurchase of the animals, at often disadvantageous terms.
It is against this backdrop that I realised that to make an impact and bring about a truly sustainable approach to investing, I had to find some way to incorporate my convictions and concern for animals and the environment into my professional life. Whereas I had adopted sustainable practices in my personal life, like my own consumption, recycling, generating hot water and electricity from solar panels to fuel our heating system and electric car, I was still spending my time, and using my financial expertise, to generate returns for investor clients, and facing daily dilemmas when confronted with the decisions of other investment managers, who for example were providing rescue financing for coal companies, providing them with short-term financial returns, but enabling hundreds of thousands of tons of CO2 to be emitted.
It became a compulsion to develop a way of investing that was contributing to a kinder, cleaner, healthier world, for the benefit of and with adherence to the principles of humanity. This has become our mantra, at Beyond Investing, and sister companies Beyond Impact and Beyond Animal, as we attempt to provide the means for investors, both private and institutional, to embed in their investment programs genuine concern for animals and the environment, by stripping funding from unsustainable activities and proactively financing and providing fundraising support for companies with sustainable solutions.
As a supplier of investment products in the listed markets, we found the existing range of ESG products to be a relatively lukewarm attempt at bringing about positive change and are constantly identifying among competitor portfolios many stocks which conflict with our own screening policies, which seek to avoid exposure to animal harm and exploitation, as well as fossil fuels, environmental damage, and human rights abuses.
In 2024, we see our approach gaining traction as investors become tired with the feeble attempts of companies in the most damaging industries to shift away from their broken business models. Usually, their focus is on “greenwashing” i.e., adopting so-called “green” initiatives to create a patina of responsibility, all the while pursuing the same destructive and harmful core business activities. In investing it is necessary to use the carrot and the stick, as we have done in instances where we have engaged with companies to inform them of our concerns. For example, Apple was excluded in 2021, due to its sales of wearables becoming a larger proportion of its business. Our discussion with their head of investor relations revealed that they had no intention at that time to stop using leather in products, despite having a commitment to sustainability. We provided them with significant evidence to emphasize the unsustainability of leather production and are pleased to see that the company has recently made the decision to no longer include leather in its products.
We expect more companies to make similar decisions as reporting on their impacts on climate and biodiversity become more widespread and obligatory. It will become harder to “greenwash” when the environmental cost of your business is starkly demonstrated in hard numbers. And for investment firms it will become harder to justify the “least worse” approaches to stock selection that are used to rationalise continuing to hold exposures to obviously damaging sectors such as fossil fuel and industrial farming. Much like with tobacco, we believe that with increasingly available evidence and education, investor distaste for these sectors will force a change, or otherwise a contraction in these industries.
Within the larger cap listed space, a more “hardcore” ESG approach, in line with the principles already adopted by Beyond Investing, is anticipated. Investors in smaller cap companies and private equity arguably have an even greater opportunity to influence company operations and behavior. Access to capital can be made conditional on improvements in sustainability, as indeed investment funds themselves, dependent on their designation, are required to show evidence constantly improving sustainability metrics across their portfolios. Managers will therefore become reluctant to add capital to companies whose sustainability credentials are poor, since it will drag down their own metrics.
Women have much to offer as advisers, researchers, portfolio managers and influencers within sustainable investing. Notwithstanding changes in the workplace, women still undertake most of the caring activities in society and are heavily involved in community projects. Their first-hand understanding of how pollution and an unhealthy and unsustainable food system impacts their family’s health means that they are already attuned to the issues and unlikely to be “box checkers”. As such women have the potential to be natural leaders in this sphere of investing thanks to their authentic and natural concern for the future of the humanity, given their own investment in bringing children into the world.
Article by Claire Smith, the founder and CEO of humane investment platform Beyond Investing, is a vegan and environmentalist with 33 years’ experience in finance and investment at top-tier banks and investment houses.
Beyond Investing creates investment programs designed for animal advocates and climate conscious investors in both public listed equity markets and venture capital.
Beyond Advisors is the architect of the US Vegan Climate Index, Europe Vegan Climate Index and Global Vegan Climate Index, a range of stock indexes which screen out all animal exploitation and fossil fuel from major market benchmarks, and the Vegan World Index, which provides a targeted portfolio of small to midcap companies relevant to the vegan trend. Beyond Advisors US subsidiary Beyond Investing is sponsor of the US Vegan Climate ETF, listed on the New York Stock Exchange.
Beyond Impact focuses on investment in early stage and growth companies providing vegan, plant-based and cruelty-free products and services.
Beyond Animal is a networking and funding platform for the animal-free products industry to connect, share information and collaborate, which incorporates Funding by Beyond Animal a tool for qualified investors to access direct investments in animal alternatives.
Claire is the founder of Beyond Cruelty Foundation, formed to campaign for zero animal exploitation and to fund safe havens for animals, which will also receive a portion of profits of companies under the Beyond Investing umbrella.
Previously, she was a research analyst, partner and shareholder at alternatives advisory firm Albourne Partners, covering managers globally across systematic quantitative equity, convertible and volatility and hedging strategies. Claire also led a project to expand Albourne’s proprietary database on alternatives managers and digitize the research process.
Prior to joining Albourne in 2004, Claire provided bespoke hedge fund research to London funds of funds and published well over 100 articles in the financial press. From 1986 to 1998 Claire was employed at various UBS group companies as a derivatives broker, marketer and structurer. Claire started her career in 1985 as a credit analyst at Chase Manhattan Bank after completing a master’s program in Chemical Engineering and Management at Imperial College, London.
Claire founded 100 Women in Finance in Geneva in 2007 and oversaw its growth in Switzerland through till 2014, as a member of the London Board, organizing over 100 events, including seven Galas which raised well over $1 million for charity. From 2013 to 2018 Claire served on the Board of AVVEC, a Geneva-based charity that provides support to victims of domestic violence.