How to Tell if a Company’s Claim of Ethical Practices Is True

Vital Farms said in a statement that it intended to defend itself against the accusations and that its practices had been independently audited.

“We are transparent about what happens to male chicks as well as what happens once hens reach their post-laying life,” the statement said. “As for the industry-standard practice of dulling the tips of hens’ beaks, that is not done to harm the birds, but to protect them.” It added, “We are pleased to offer products that value animals including by providing hens a meaningfully better life than the confinement they would face in the industrialized food system.”

Nisha Devarajan, a spokeswoman for Vital Farms, declined to go beyond the statement or to make the executives named in the suit available to talk, citing the litigation.

What investors can do involves the same type of due diligence they do with any investment, just through a sustainable lens. Doug Heske, chief executive at Newday Impact, which manages $250 million with a sustainability strategy, said the firm looks at not just how the company treats its shareholders but also all the people who contribute to what the company does.

“For us as an organization, there’s this common thread that runs through most companies that behave in a responsible way, and it’s rooted in long-term decisions and strategies,” he said. “That’s a driver of returns. There’s no such thing as a perfect publicly traded company.”

Investors can also look for any shareholder actions.

“Look at the range of shareholder resolutions filed urging changes in policy or disclosures,” said Timothy Smith, director of E.S.G. share owner engagement at Boston Trust Walden, a wealth management firm.

Victor Zhang, chief investment officer at the asset manager American Century Investments, said that after making an investment, investors needed to check in regularly to ensure the company’s E.S.G. practices remained the same. It’s often easier to monitor and police larger companies for greenwashing than smaller, niche companies, he said.

Article source: https://www.nytimes.com/2021/05/28/your-money/company-ethical-practices.html