Ethical Scoring-AQ

Ethical Scoring Checklist for Companies Based on Animal Cruelty (0-100 Scale)

A) Involvement Type (40%)

Explanation: This ethical scoring checklist evaluates companies based on their direct and indirect involvement in activities that exploit animals, with a focus on manufacturing processes, product composition, and the industries they serve. The scoring system ranges from 0 (no cruelty) to 100 (extreme cruelty), providing investors a clear guide for evaluating the ethical standing of companies.

Scoring Breakdown:

1) Direct involvement: The company directly uses animal products or is involved in industries like leather, meat, or dairy production.
Example:

• A fashion company Aditya Birla Fashion and Retail Ltd. producing branded apparels or a dairy company like Hatsun Dairy
• A company supplying processed meat like Godrej Agrovet
  Score: 40 points.

2) Indirect involvement: The company manufacturing products or services for industries that exploit animals, even if it doesn’t directly use animal products itself.
Example:

• A CNG company like Mahanagar Gas which has gas exploration process that impacts the wildlife and more vulnerable species
• A chemical company like Aarti Industries supplying ingredients only to pharmaceutical or agrochemical companies
  Score: 20 points.

3) Minimal Indirect Involvement: The company generates income from a source that does not exploit animals; however, it invests its funds in sectors that may contribute to the exploitation of animals.
Example:

• An insurance company like ICICI Prudential that provides life insurance, but uses the revenue to invest in mutual funds of the factory farming sector, pharmaceutical companies etc.
• A construction company like Ashoka BuildCon that uses cement to build concrete structures, while the cement contains tannery sludge which is made from animal derived ingredients.
  Score: 10 points.

4) No involvement: The company neither uses animal products nor serves industries that exploit animals.
Example:

• A renewable energy company like IREDA focused entirely on wind or solar power.
• An electronic company like Dixon Technologies involved in the sale of earphones, phones, TV etc.
  Score: 0 points.

B) Revenue Link to Exploitation (30%)

Explanation: This criterion measures what percentage of the company’s revenue comes from industries or activities that exploit animals. It looks at both direct and indirect sources of revenue linked to animal cruelty.

Scoring Breakdown:

• 50% or more: A significant portion of the company’s revenue is tied to industries that directly exploit animals.
  Example: A pharma company like Abbott India whose core business involves animal testing.
  Score: 30 points.
• 10-50%: A moderate portion of the company’s revenue comes from industries that are indirectly linked to animal exploitation.
  Example: A software company providing its technology services to the defense sector, which inturn harms the environment and wildlife.
  Score: 15 points.
• 0-10%: A small or negligible portion of revenue is linked to industries that exploit animals.
  Example: A bank/NBFC/asset management company whose revenue from animal cruelty derived loans (like diary or animal farm loan) are not disclosed. Assuming a small portion of the revenue is coming from such loans, they are scored 5 points.
  Score: 5 points.
• 0%: No revenue is linked to industries or activities that exploit animals.
  Example: A tech company providing software services to sectors unrelated to animal exploitation.
  Score: 0 points.

3. Severity of Harm (20%)

Explanation: This criterion quantifies the degree of harm caused by the company’s products or processes to animals. It includes both direct harm (e.g., slaughter or suffering) and indirect harm (e.g., habitat destruction or pollution affecting animals).

Scoring Breakdown:

• Severe harm: The company’s activities cause significant suffering or death to animals.
  Example: A company involved in the leather industry where animals are slaughtered for hides.
  Score: 20 points.
• Moderate harm: The company causes indirect harm to animals through its products or services.
  Example: An e-commerce platform delivering meat, leather, dairy products based on order requests.
  Score: 10 points.
• Mild harm: The company’s activities result in minimal or indirect harm to animals, such as minor disruption to ecosystems.
  Example: A food packaging company that uses minimal animal-derived materials (e.g., beeswax coating).
  Score: 5 points.
• No harm: The company’s products or processes cause no harm to animals.
  Example: A green energy company producing solar panels.
  Score: 0 points.

4. Species Exploited (10%)

Explanation: This criterion evaluates the type of animals impacted by the company’s operations or products. It considers both direct use in products and indirect effects on wildlife through processes such as pollution or habitat destruction.

Scoring Breakdown:

• Higher sentient animals: The company’s products or processes affect animals with higher sentience (e.g., mammals, birds, fish).
  Example: A pharmaceutical company testing on animals like rabbits or monkeys.
  Score: 10 points.
• Lower sentient animals: The company’s processes affect animals with lower sentience (e.g., insects).
  Example: A pesticide company impacting insect populations.
  Score: 5 points.
• None: The company does not exploit any species directly or indirectly.
  Example: A software company that does not affect animals through its products or operations.
  Score: 0 points.

Total Score Calculation

The final score ranges from 0 to 100, where higher scores indicate greater involvement in animal cruelty while a low score indicates minimal or no involvement in animal cruelty

Star Rating System
Based on the score each company is star rated

• 5 stars (★★★★★) – Fully ethical, no cruelty
• 3 stars (★★★☆☆) – Moderate cruelty, needs caution
• 1 star (★☆☆☆☆) – Extreme cruelty, avoid