Ethical investing options
Like other investors, Muslims look for a diversified mix of investment products to add to their portfolios; however, they are restricted by Sharia, or Islamic law. According to this law, Muslims must evaluate a company’s business activities and financial records to determine where its primary revenue comes from and how income and expenditures are managed. This information allows them to determine if the investment is halaal, or acceptable. If not, the investment is haram, or unacceptable. Haram activities include the manufacture or marketing of alcohol, gambling or gaming activities, conventional financial services, pork and pork products and pornography. In addition, if a company’s interest-based profits or holdings exceed certain limits, then investing in the company is forbidden.
According to the People for the Ethical Treatment of Animals (Peta), cruelty-free investing ensures the investment only in companies, mutual funds, bonds, and other investment vehicles that do not support, cause, or contribute to animal exploitation and suffering, including the destruction of natural habitats. Most commonly, investors eliminate the companies that test products on animals from their portfolios. Alternatively, some investors choose to selectively invest in the companies that have agreed to ban testing on animals permanently.