Building a Portfolio That Matches Your Values

If you're vegan, you've already done the hard work of aligning your daily life with your values. You've examined what you eat, what you wear, what products you buy.

But there's often a disconnect when it comes to investing. People who carefully avoid animal products might still have pension funds invested in factory farms.

Let's close that gap.

Why Values Matter in Investing

Financial argument: Companies with strong ethical practices often have better risk management, regulatory compliance, and long-term prospects. There's evidence that sustainable investments can match or beat conventional returns.

Psychological argument: When your investments conflict with your values, it creates cognitive dissonance. You're simultaneously funding the things you oppose. This is stressful, even if unconsciously.

Impact argument: Where money flows matters. Collective investor behaviour influences corporate behaviour, access to capital, and ultimately what kind of economy we build.

Identity argument: Your portfolio is part of who you are. For many people, ensuring their money reflects their ethics is simply the right thing to do.

Step 1: Define Your Values

Before building a portfolio, get clear on what matters to you. Values vary even among vegans:

Animal-focused priorities:

• Factory farming exclusion (essential)
• Animal testing exclusion (essential)
• Animal entertainment exclusion
• Pet industry involvement (varies)
• Companies transitioning to plant-based (varies)

Environmental priorities:

• Fossil fuel exclusion
• Deforestation involvement
• Waste and pollution
• Climate positive/negative
• Biodiversity impact

Social priorities:

• Worker rights and conditions
• Supply chain standards
• Community impact
• Diversity and inclusion
• Data privacy

Governance priorities:

• Executive compensation
• Transparency
• Tax practices
• Political lobbying

Not everyone weights these equally. Your portfolio should reflect YOUR priorities.

Step 2: Choose Your Approach

Several strategies can align investments with values:

Negative screening (exclusion): Remove companies involved in activities you oppose. The clearest approach—if something conflicts with your values, it's out.

Positive screening (selection): Actively choose companies doing good things: renewable energy, plant-based food, sustainable materials, social enterprises.

Best-in-class: Within each sector, choose the more ethical options. Can mean investing in "less bad" companies, which doesn't work for vegans regarding animal industries.

Impact investing: Seek measurable positive outcomes. Impact investments often sacrifice some return for guaranteed social/environmental benefit.

Engagement: Keep holdings in problematic companies to engage as shareholders. Pushes for change from within, but means funding those companies in the meantime.

Recommended for vegans: Negative screening as a baseline (exclude all animal exploitation), combined with positive screening (favour actively good companies).

Step 3: Build Your Portfolio

Once values are clear and approach is chosen, portfolio construction involves:

Asset allocation: What mix of equities (stocks), bonds, and other assets? This depends on:

• Your risk tolerance
• Your time horizon
• Your goals

Younger investors can typically tolerate more volatility (higher equity allocation). Those approaching retirement usually want more stability (higher bond allocation).

Geographic diversification: Don't put everything in one country. Global diversification reduces risk from any single economy's problems.

Sector diversification: Even within ethical constraints, spread across sectors. Too much concentration in any one area (even "good" sectors like clean energy) increases risk.

Fund selection: Choose funds that match your screens. Options include:

• Ethical index funds (passively managed, lower fees)
• Actively managed ethical funds (higher fees, potentially better screening)
• Thematic funds (focused on specific areas like clean energy)

Step 4: Verify Alignment

Don't just trust labels. Verify that your portfolio actually matches your values:

Check holdings: Download fund factsheets and review top holdings. Any names you don't recognise? Research them.

Verify exclusions: Does the fund explicitly exclude what matters to you? Ask the provider if it's not clear.

Monitor ongoing: Companies change. New products, acquisitions, scandals. Review periodically to ensure continued alignment.

Step 5: Accept Trade-offs

Values-based investing involves trade-offs. Being honest about them helps:

Diversification constraints: Excluding industries means fewer options. This could increase volatility or slightly reduce diversification benefits.

Potential return impact: Some studies show ethical investing matches or beats conventional returns. Others show small underperformance. The honest answer: results vary, but any difference is likely small.

Screening imperfections: No screening is perfect. Complex supply chains and corporate structures mean some exposure might slip through. Do your best, accept imperfection.

Research effort: Values-based investing requires more homework than buying a standard index fund. Worth it, but real.

The Professional Option

If this feels overwhelming, that's what we're here for.

At Vegan Invest, we handle all of this:

• Values translation into screening criteria
• Portfolio construction with proper diversification
• Fund selection and monitoring
• Ongoing management and rebalancing
• Personal advice tailored to your situation

You provide your values and goals; we build and manage a portfolio that matches them.

Getting Started

Whether you DIY or use professional help:

1. Clarify what matters to you (beyond just "ethical")
2. Audit your current investments for misalignment
3. Research options that meet your criteria
4. Diversify appropriately within your value constraints
5. Review regularly to maintain alignment

Your money is a powerful expression of who you are. Make sure it speaks for the values you hold.

Ready to build a portfolio that reflects your values? Start with our assessment and get personalised recommendations.