Yahoo Finance Investors unmoved by Dove's cruelty-free certification by PETA
This week skincare company Dove announced its products are now cruelty-free after receiving PETA‘s seal of approval, certifying that there will be no animal tests done anywhere in the world in association with Dove products. PETA (People For the Ethical Treatment of Animals) is the largest animal rights organization in the world and its cruelty-free logo, which has been used by a list of 3,500 cruelty-free companies such as Bare Minerals and LEAP Organics, will now be placed on all Dove product packaging and visible starting in 2019. This will first come into effect in North America and Europe.
Since December 2017, Dove has stopped importing new products into China that would require animal testing, according to Danika Johansen, marketing lead at Unilever Canada. Unilever is one of the leading suppliers in beauty and personal care products and is the parent company to Dove.
“All of the products Dove will be launching in China in the future will either be produced locally or sold through cross-border channels, neither of which requires such testing,” Johansen tells Yahoo Finance Canada.
Unilever is taking this mandate even further by partnering with animal protection leader Humane Society International (HSI) in support of a global ban on animal testing for cosmetics. The organizations have launched a multi-year, open collaboration to ensure safety and regulatory practices are upheld while continuing to invest in the training of future safety scientists.
Scott Boassaly is a financial advisor with Balance Investments/Quadrus Investment Services and a certified responsible investment advisor (RIAC) based in Ottawa. He says these sort of announcements could impact investors decisions if they choose to invest along with the social, environmental and ethical values seen from organizations such as PETA, but not all investors are interested or educated in responsible investments (RI). Choosing to invest along socially-responsible lines is a judgment call, and Boassaly says for most investors it’s more about how much they earn not whether they are making a positive impact with their investment decision.
READ MORE: Investors are making a difference with their portfolios
Following the news from Unilever, Boassaly told Yahoo Finance Canada that “an investor who is committed to socially responsible investing would likely have sought out companies that had already ceased animal testing, while an investor who is not committed to socially-responsible investing and who already owns Unilever in a mutual fund may not be aware that they own the company or care that it has stopped animal testing.”
“I have yet to meet an investor who was motivated by a news release or announcement or article they read,” says Boassaly, but adds that investors that are truly passionate about responsible investments are more “willing to accept a lower return or even a delayed return on their investment,” he says.
How PETA measures up
Measuring the standards of an organization like PETA is another element in the discussion. Adam Spence, director of Social Venture Connexion (SVX) at MaRS, notes that certifications and mandates do hold weight, but are contingent on the verification process.
Investors are more keen to dive in when they know a company has gone through a standard assessment by an independent third party, explains Spence. If “PETA has an open process to which they evaluate the cruelty-free nature of products while reporting publicly the results of such reports,” he says, this vetting process is what can capture an investor’s interest, trust and buy-in.
It’s not just about a stamp. “It’s about having a verifiable quality process by which you are arriving at that conclusion,” says Spence, but the ethical practices of companies can certainly motivate investors to take a closer look.
“The more that companies can leverage certifications and make these kinds of partnerships that are verifiable and produce the right kind of data, and that can demonstrate solid social, environmental performance, I think the better it is for all of us,” says Spence.
Amanda Nordstrom, who represents PETA’s Beauty Without Bunnies program, explained in detail how companies can qualify.
“PETA’s Beauty Without Bunnies certification is available to companies that make cosmetics, personal-care products, household-cleaning products, and other common household products,” Nordstrom wrote in an email to Yahoo Finance Canada. “In order to be certified as cruelty-free by PETA’s Beauty Without Bunnies Program, companies must submit a Statement of Assurances signed by their CEO or executive management team verifying that neither they nor their ingredient suppliers conduct, commission, or pay for any tests on animals for ingredients, formulations, or finished products anywhere in the world and will not do so in the future.
“Companies applying to the program must also submit a detailed list of questions about how the companies test their products, where they are sold, what kinds of products they offer, and what kinds of ingredients they use. We also require all companies to have agreements in place with their suppliers that no animal testing is done on any of the ingredients or raw materials they supply to the company for its products.”
Looking at the long game
The impact of moves like this can be slow to show. An investment’s performance in this space is hard to measure in the short term because the transformation could take place over years or — a decade.
“You’re not looking at ‘what’s a home run today’ or ‘what is my ten-times return in a month’ but rather ‘what am I doing in order to protect my savings, protect the planet and protect the quality of life for all of us’,” explains Spence. “When you think about the longer term view of investing where you invest in that triple bottom line, you’re going to have a better more sustainable performance.”
Still, investors are always thinking about what their money is doing, and for some playing the long game in ethical investing, it’s just not appealing, cruelty-free or not.
“It is very difficult for the investor to quantify or even see the effect their decisions are having,” says Boassaly. “There’s a bit of blind faith required unless the investor chooses to be very proactive and investigate themselves. Some fund companies do publish reports on how their investment decisions are going, which offers some solid reassurance, hope or even, at times, disdain for the investor.”
According to a report released by MaRS this summer entitled Market Momentum: Impact Investing & High Net Worth Canadians, nearly 90 per cent of high net worth individuals in Canada cited interest in impact investing and a third of them are reported already doing so.
Responsible investment is about “intentionally doing good while doing well financially…ultimately we all have our values and some people recognize that they can align their investments with those values,” says Boassaly.
Tuesday’s announcement had a slight effect on Unilever‘s stock, opening at US$53.64 per share and reaching a high of US$54.02 a share, where it hovered around, but it has since dipped down. Tuesday’s spike could’ve also been a cause of other factors pertaining to the company (i.e. Unilever’s choice not to move headquarters out of the UK and lose FTSE status).
Still, an announcement like this can be championed and may be enough for some investors to take pause.
“Canadians and people around the world are moving from ethical purchasing to ethical investing,” says Spence. “We’re not thinking about what we buy, but how we save and how we invest, so with announcements like this many see these sorts and think about how it might align with their bank accounts or investment portfolios.”
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