KLD's Animal Welfare Service

         KLD offers a comprehensive animal welfare service designed to meet the needs of institutional investors, money managers, and foundations implementing investment mandates associated with animal welfare issues.

The Screens

         The KLD Animal Welfare Service identifies companies with involvement in various types of animal-related activities, such as animal testing, factory farming, fur, leather, entertainment, pet stores and hunting. The service can be customized to include any or all of KLD’s animal welfare screens, several of which are outlined below:

Discretionary Testing: The company conducts or contracts out animal tests for the development of products for which animal data is not legally required.

Mandatory Testing: The company conducts or contracts out animal tests for the development of products for which animal data is legally required.

Factory Farming: The company engages in animal husbandry; slaughters animals or processes animal products; or derives significant revenue from the sale of meat products.

Fur: The company raises, traps, or slaughters animals for their fur or derives identifiable revenue from the sale of fur products.

Leather: The company manufactures or sells leather products as a primary part of its business or operates a tannery, skinning operations, or any other similar operation involving the processing of animal skin or hide.

Animals in Entertainment: The company owns or operates businesses that feature animals in captivity or in sporting events.

The Product

         KLD’s Animal Welfare Service is offered in several forms, including portfolio audits, restricted investment lists, compliance, and investment policy development.

Portfolio Audits: KLD analyzes existing portfolios to ensure compliance with animal welfare screening criteria, identifying companies that qualify for investment and those that do not, based on a client’s screening guidelines.

Restricted Investment Lists: KLD can customize restricted lists to identify companies that violate a client’s animal welfare screening criteria. Money managers often use these to prevent buying of problematic equities for client accounts.

Compliance: KLD can integrate its animal welfare service into certain trading or compliance systems. KLD delivers the information through a comma or tab delimited file that includes security identifier information to match the trading or compliance system security master information and code the appropriate securities. The file can also include detailed information on a security issuer’s type of involvement and detailed information describing the involvement.

Investment Policy Development: KLD works as a consultant with clients to create and implement social guidelines for their investment practices. Through its Animal Welfare Service, KLD offers assistance in formally articulating and implementing an organization’s animal welfare investment policies and screening guidelines.

Methodology

         KLD relies on several data sources to inform its animal welfare ratings and analysis. Data are collected in a disciplined process from a wide variety of company, government, non-governmental organization and media sources. KLD updates its animal welfare data annually using press searches, company websites, information from third party providers, non-governmental and governmental organizations, company filings with the SEC, and direct contact with companies.

Additional Information

         As part of its research process for the Animal Welfare Service, KLD surveyed companies on whether they had formal policies in place related to animal testing, animal usage, or the humane treatment of animals. Among companies that utilize animal tests, those that reported having animal welfare policies in place were nearly all large-cap companies. Of those, pharmaceutical and biotech companies were most likely to have a formal animal welfare policy in place. The policies generally cited a commitment to the humane care and use of laboratory animals and efforts to minimize the number of animals used in research.

         If you wish to learn more about KLD’s Animal Welfare Service please contact Michelle Lapolla, Manager of Consulting Services at (617) 426-5270 or mlapolla@kld.com.