Animal Cruelty Research Methodology

3rd Oct. 2023

How does Mindful Money identify companies engaging in Animal Cruelty?

Animal cruelty is a pressing concern that encompasses a spectrum of issues, from animal testing to factory farming, affecting creatures large and small. At Mindful Money, we envision a world where compassion extends to all living beings. We recognise that the treatment of animals isn't just a matter of morality—it profoundly impacts the sustainability of our planet. Our approach considers various facets of animal cruelty, ensuring that investors can make informed choices aligned with their values.

What is animal cruelty and why should investors care?

Animal cruelty involves actions, whether deliberate or negligent, that cause harm, suffering, or distress to animals. These actions can range from abuses and neglect to forms of exploitation, often concealed from plain view.

Cruelty towards animals not only inflicts physical and emotional harm on sentient beings, but its impacts also extend more broadly to people and the environment. Such consequences include harm to societal well-being, disruptions to ecosystems, and the depletion of our natural resources. This highlights the gravity of animal cruelty and the urgency of taking action.

While the moral concern for animal well-being or the planet is often clear, investors should also be aware that animal cruelty serves as a window into a company's ethical and sustainability practices. These practices, in turn, affect a company's reputation, legal responsibilities, and financial health, making it a vital factor for investors who seek responsible investment choices.

You can find out more about funds that don't invest in animal cruelty here.

How does Mindful Money find and categorise these companies?

Using a range of credible sources and ongoing engagement with recent research, we maintain a comprehensive list of companies engaged in cruel practices towards animals. Mostly, we use a structured framework supported by data from Sustainalytics, a global screening service (covering 30,000 global companies), to collate and understand to what extent companies are involved in varying aspects of animal cruelty, either by what their practices are or how much revenue they derive from such practices. This service also gathers public data from media and NGOs about specific on-off or ongoing events involving a company that has caused harm to animal rights. To supplement this, we review decisions from major global responsible investors such as the NZ Super Fund and the Norwegian Pension Fund (NBIM).  

In our definition of animal cruelty, we categorise companies into sub-categories based on four critical issues: Animal Testing, Fur and Speciality Leather, Factory Farming, and Animal Welfare Issues. If a company's practices align with more than one of these issues, they may be included in multiple sub-categories.

This comprehensive approach ensures we capture the diverse dimensions of animal cruelty, empowering you to make mindful investment decisions that align with your values.

Further information on Mindful Money's overall methodology can be found here.

Animal Testing

We consider companies that test, to any extent, cosmetics, personal care, household, and chemical products on animals to be involved in animal cruelty. This issue raises ethical concerns as it violates animal rights. Testing practices often involve skin and eye irritation tests, lethal dose tests, and other experiments that cause suffering to animals.

Some countries mandate animal testing for certain products, leading companies that choose to sell to these markets to comply. In New Zealand, the government banned cosmetic animal testing within the country in 2015, however, this law does not apply to imported products that may have been tested on animals elsewhere.

While animal testing for regulatory purposes varies by country, it's crucial to note that cruelty-free alternatives exist, making such practices both cruel and unnecessary. Companies can create safe cosmetic products using existing ingredients with a history of safe use, and modern testing methods offer more reliable, less time-consuming, and less expensive alternatives. Numerous companies have demonstrated that it's entirely possible to eliminate animal tests.

We consider the following question when determining if companies that test on animals meet our definition of animal cruelty: “Does benefit to humans and avoidance of major harm from the use of a product override the consideration of the use of other animals for testing?” Therefore, at this stage, our definition does not extend to companies that conduct animal testing for pharmaceutical and biotechnology purposes. Companies that test on animals for food and agricultural purposes are included on a case-by-case basis where practices are considered to be unnecessarily harmful to animals (e.g., including pesticide toxicity testing, but excluding pet food palatability testing and human food product safety testing).

Company profile: China's regulatory requirements for animal testing differ for "ordinary" and "special" cosmetics. Ordinary products, like shampoo and makeup, don't require mandatory animal testing, while special products, such as hair dyes, sunscreens, or products with specific beauty claims, still undergo these tests. Some companies, like L'Oréal and Estée Lauder, continue to sell non-ordinary products in China, meaning they are involved in animal testing.

Fur & Speciality Leather

We identify companies involved in animal cruelty when they produce fur and/or speciality leather or generate more than 10% of their total revenue from the retail of these products. Some high-end fashion giants, such as Hermès and LVMH (Moët Hennessy Louis Vuitton), offer luxury items crafted from exotic leathers like crocodile, python, and ostrich, as well as real fur sourced from animals like mink and foxes. Disturbingly, many of these animals are bred solely for their skins.

Company profile: In 2021, reports surfaced regarding severe animal mistreatment at two Indonesian slaughterhouses supplying LVMH with snakeskin leather. Additionally, cases of animal abuse were uncovered at a crocodile skin supplier used by both Hermès and LVMH in Australia. These troubling cases serve as a stark reminder of the urgency to address animal cruelty within the fashion industry, especially given that such incidents often remain hidden from public view.

Factory Farming

We categorise companies involved in intensive poultry operations that inflict undue suffering on animals as participants in animal cruelty. The use of fast-growing breeds in these operations accelerates the process, enabling animals to reach their target weight within a mere 4 to 6 weeks before they meet their fate at the slaughterhouse. Because of this, these types of operations house animals at high densities, leading to much greater mortality rates and severely compromised welfare.

Company profile: Companies like Tyson Foods, Pilgrim's Pride, and Inghams have drawn scrutiny for documented instances of cruel practices within their poultry operations, even facing legal charges related to animal abuse. Pilgrim's Pride, a significant subsidiary of JBS SA, has been a repeat offender in this regard, with numerous incidents of cruelty reported at their chicken slaughterhouses and farms. In a shocking 2022 revelation, the Department of Agriculture (USDA) disclosed that nearly 36,000 chickens perished due to freezing during transportation to one of Pilgrim's Pride facilities, while another facility saw 190 chickens left to die inside a fallen container. The USDA has similarly cited Tyson Foods 15 times at 11 chicken slaughterhouses across the US for instances of animal negligence and abuse.

Animal Welfare Issues

We consider companies engaged in recent or ongoing cases of harmful treatment of animals that severely compromise their well-being to be conducting animal cruelty. This subcategory encompasses a wide range of concerns, including companies that export live animals, subjecting them to undue stress, as well as those exploiting animals for entertainment, such as marine parks that confine whales and dolphins to cramped and unnatural environments. This confinement within inadequate spaces often results in physical and psychological stress for animals, leading to shorter lifespans and a profound inability to engage in their natural behaviours, thereby diminishing the quality of their lives. We also address cases of animal abuse, recognising the critical importance of safeguarding the welfare and dignity of all sentient beings.

Company profile: Companies like Tassal and Huon Aquaculture (owned by JBS) have been using underwater explosives as seal deterrents at salmon farms in Tasmania, where there have been several cases of seal injuries and even reported seal deaths. JBS has also been repeatedly in the media for cases of animal abuse at their pork slaughterhouses across the USA, with a case earlier this year revealing workers at the plant violently beating animals with paddles, and cases in 2021 revealing carbon dioxide being used prior to slaughtering which caused severe distress and suffering to the animals.