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

Vital Farms said in a statement that it intends to defend itself against the allegations and that its practices have been independently verified.

“We are transparent about what happens to male chicks and what happens when chickens reach their lives after they are laid,” the statement said. “As for the industry practice of blunting the tips of chicken beaks, it is not done to harm the birds, but to protect them.” It added, “We are excited to offer products that value animals by giving chickens a significantly better life than the limitation they would have in the industrialized food system.”

Nisha Devarajan, a spokeswoman for Vital Farms, declined to go beyond the testimony or to make the executives named in the lawsuit available for discussion, citing the litigation.

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

“For us as an organization, there is this common thread that runs through most companies that act responsibly and that is based on long-term decisions and strategies,” he said. “That is a driver for the return. There is no perfect public company. “

Investors can also look for shareholder action.

“Check out the range of shareholder resolutions that have been filed requesting changes to policies or disclosures,” said Timothy Smith, director of ESG shareholder engagement at Boston Trust Walden, an asset management firm.

Victor Zhang, chief investment officer at asset manager American Century Investments, said investors need to check-in regularly after investing to ensure the company’s ESG practices remain unchanged. It is often easier to monitor and monitor larger companies for greenwashing than smaller niche companies, he said.

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