Do that, and it becomes more expensive to raise animals, since you’re doing so humanely, which is a good thing. The cash cost of eating meat will go up, people will eat less and emissions will fall.
That’s how Karner Blue ends up with Chipotle in its portfolio: It likes the chain’s animal welfare efforts (ongoing food safety questions aside). But the parent of Burger King didn’t make the cut, even though it’s got a vegetarian Whopper with an Impossible Burger patty these days. That’s because the parent, Restaurant Brands International, also owns Popeyes, which only recently agreed to take a big step to improve its treatment of chickens.
Any edge cases reflect the kinds of compromises that nearly any kind of investment may require for most consumers. Because of its desire to direct capital to above-average companies in as many industries as possible, Karner Blue sometimes ends up in a situation where it’s effectively buying the best house in a bad neighborhood.
Take retail, home to lots of chains selling lots of animal skin. Karner Blue owns H&M, because it appreciates the chain’s stance on staying away from leather that comes from animals raised on rainforest land. The fund manager is less fond of the fact that consumers don’t tend to keep the retailer’s cheap clothing for very long. “We have a problem with the sustainability of the product,” Ms. Benjamin said. “You have to hold your nose sometimes.”
The other approach involves compromises, too.
The Vegan ETF nixes fossil fuel companies, but it still owns stock in automobile manufacturers that make gas-powered vehicles with leather interiors. Here, the fund’s creator, Beyond Investing, saw an opportunity to push the car companies toward skin-free seating, given that Tesla has made that move with some models.
“We think that means others should change as well,” said Claire Smith, chief executive of Beyond Investing, which runs the Vegan ETF.
Scour her holdings and you’ll probably find something that is personally objectionable. I wouldn’t want to own Intuit, given all of the reporting from Pro Publica about how it tried to keep people from filing their income tax returns for free. Equifax makes an appearance too, which hurt my heart. We people are animals too, after all, and Equifax treated us shabbily in the wake of its horror show of a security breach.