Lee Coates, director of Ethical Investments, looks at the different ways a vegan lifestyle can be paired with vegan money options, and how you can save and invest ethically.
A vegan lifestyle can be paired with vegan money options if you look hard enough. It is important to understand that money, just like food, involves careful choice to meet a vegan lifestyle. If you eat the first thing put in front of you it’s the same as investing or saving in the first financial product that you see – it is almost certainly not going to be vegan!
Making the right money choice can be daunting, so I’ve split the myriad of options into several key areas. Unless otherwise stated, I’ll be referring to options available in the UK, though the USA and Australia is considered too.
Banking
You don’t actually need to use a bank to have a bank account. The largest building societies now offer all the services that you will need for 99% of the average person’s banking needs. If you bank with a bank, the vast majority lend money to companies so your money could be financing factory farming and other areas of animal exploitation. Building societies, on the other hand, don’t lend to companies to finance their business activities so any money you have in a building society is going to be ‘ethically neutral’. A building society current account, therefore, is the best place to start. Any building society in the UK is fine. In the USA the first question to ask of any savings bank or similar is...”do they make loans to companies/businesses?”. If the answer is ‘yes’ then move on because there is a good chance that at least one of the businesses they lend to could be involved in exploiting animals (local farmers, meat processors, etc.). But there is hope. In Australia, for example, our UK Managing Director has been working with an existing bank to adopt cruelty free policies and we are hopeful of positive developments in 2017.
Investments
From saving £1 to investing £Xm, the word investment covers anything and everything. So, let’s stick to investment areas that of you will already have been exposed to.
Cash ISAs – for the same reasons given for banking above, save via a building society.
Stocks and shares ISAs – you might want to seek financial advice on whether you should be investing in the stock market. For the first toe in the water it would be best to invest in ethical funds rather than buy individual shares – investment funds give you access to lots and lots of individual companies to spread the risk. There are some excellent vegan ethical funds available.
Savings accounts – for short to medium term (under 10 years) go for a building society account. If you choose one which is internet-based, you’ll generally get a better rate of interest compared to an account which is offered direct through your local branch. In the USA the same issues apply as for banking above. Aussies – keep an eye out on this page for exciting developments in savings, coming soon.
Private pensions
In the wonderful world of ‘pensions simplification and choice’ things have never ever been more complicated than they are now. If you are looking for a private pension to build for your retirement or you have already built the fund and are looking to draw from it there are some excellent vegan options available with great performance. Professional financial advice is recommended to help you choose which one. In the USA it would be possible to put together a ‘vegan-screened’ investment portfolio for a 401k or similar, but this would need the help and support of a knowledgeable adviser. In Australia, there is a vegan superfund.
Auto-enrolment
All employers will, irrespective of their size, soon be required to enrol all employees into a pension arrangement in the UK. This might be a full-blown pension scheme or it might be a collection of individual private pensions. Whatever the scheme there are vegan options available but most employers will not be defaulting to one of the companies which offer a vegan option. None of the new pension providers set up to support auto enrolment have a vegan option and most don’t even have an ethical option. The best employers (the ones you can talk to) will allow their staff to opt out of the default scheme and open a private plan to meet their vegan criteria. These more enlightened employers will continue to make employer payments into your private vegan plan – they don’t have to but the best employers will.
The alternative to opting out is to request that your employer choose an auto enrolment option which has a robust and, ideally, vegan ethical investment option. Whilst your workplace colleagues might not all be vegan a good number of them would probably want to invest ethically and sustainably for their future. More information can be found on our website.
By Lee Coates
Lee Coates is the Director of Ethical Investors. Established in 1989, it’s one of the UK’s leading financial planning firms specialising in ethical and responsible investment. In 1992 they pioneered the development of the UK’s first vegan investment funds and established Australia’s first vegan Superfund in 2010.
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