One portfolio please, hold the cows

Financial planner Brenda Morris and nearly all her clients have something in common: They avoid eating, wearing or using anything that comes from animals.

Morris and her Virginia-based firm Humane Investing have found a niche with vegans.

For decades, there's been a growing movement of consumers who avoid animal products. But applying an animal-free standard to investments is another matter — there are products and services on the market, but not necessarily enough to build a fully diversified portfolio.

“When I started, I wanted to do humane investing to the extent possible. But to be honest, I didn’t know what that meant,” Morris said. “Anytime I would ask a mutual fund company, ‘What is your mandate toward animals?’ I would get a blank stare.”

That was in 2009. After she left Wachovia in 2008, Morris spent a year with Lincoln Financial before joining First Affirmative Financial Network. She founded her RIA in 2020.

Since 2016, numerous investment providers, vegan or not, have joined Farm Animal Risk and Return initiative, or FAIRR, an international collaboration “that raises awareness of the ESG risks and opportunities in the global food sector,” according to the group’s site. Its “mission is to build a global network of investors who are aware of the issues linked to intensive animal production and seek to minimize the risks within the broader food system.”

That group “[does] what I do but with a lot more assets,” Morris said. Asset managers representing a total of $70 trillion have signed on, according to FAIRR, and Morris has encouraged some of those companies to join. She also uses managers who participate in FAIRR.

Humane has about $13 million in assets under management across 60 accounts, she said.

All but one of her clients is vegan, as far as she knows, and most of them found her because they were looking for ways to minimize their investment exposure to animal agriculture.

Most of her clients are in Goldman Sachs’ Folio Financial separately managed accounts, though she has recently started offering Charles Schwab institutional portfolios.

While the portfolios screen for managers that are part of FAIRR, they don't automatically exclude investments in areas like pharmaceuticals, which many vegans may not like as a result of the industry's use of animal testing. Some clients therefore decide on their own to exclude pharma, Morris said.

“As a fiduciary, I wouldn’t exclude the asset class altogether, but they can,” she said.

Even so, Morris favors advocacy over exclusion in many cases. She spends a big part of her day talking with companies about their practices, she said.

“The feedback I’ve gotten so far isn’t great, because they’re still testing on animals,” Morris said. But “one of the reasons I’m very much pro-shareholder-advocacy is that I see so much potential and room for engagement.”

Talking has always been one of her strong suits.

“I started off in customer service at a bank. I talked too much. I got in trouble,” she said. Colleagues suggested she work in sales, which for a while was a better fit. She spent years getting licenses, eventually working as an advisor at Wachovia, which she left in 2008.

“I won’t say that I left. They said, ‘You have to sell annuities to increase your commissions,’ and I didn’t want to do that,” she said. “They didn’t want fee-based assets — they wanted annuities.”

Morris is also not shy about stirring the pot, having recently called out sustainable asset manager Boston Trust Walden over its holdings of McDonald’s stock. While that firm’s funds are considered more sustainable than those of non-ESG competitors, the holding appears to go against its own mandate, she said. “It’s greenwashing.”

At the same time, she advocates for other vegan professionals who are in her line of work. Morris started a site that's essentially a small rolodex of vegan or vegetarian advisors — people who might be considered her competitors.

“It’s really neat to collaborate with people who all get it,” she said. “I couldn’t do this just to make more money — money doesn’t motivate me. Changing the world does.”