Fur, Skin, Leather, Wool & Musk
Animal derived ‘body products’ are used in a wide variety of sectors and businesses, for example; Car industry – leather, Fashion – leather, wool, fur and perfumes, Household and furniture – leather, down, wool, feathers and Traditional medicine – animal parts including skin and scales.
In many instances these are sourced as a by-product of the meat industry, but in others animals may be bred, farmed or reared specifically for their body parts or fur. The use of animals specifically for these purposes raises challenges for responsible investors. For instance, whilst skins would generally be supported where supplied as a by-product, specific farming would not. EdenTree does not have a stated policy on fur and it is not among our Ethical screens within the Amity range. However, we recognise investment in fur is controversial and best avoided. We take a closer deep dive into this part of the market where animal parts are critical to everyday household products.
The global fur trade has been valued at c$40bn (retail, sales and farming). Whilst still significant, fur is in long-term decline owing to successful campaigns against its being secured through trapping and farming. The trade is dominated by fur farms in the USA and Russia and regulated trapping in Canada. In the US over 3 million mink pelts are farmed annually with over 650,000 animals bred specifically for their fur. Fur harvesting is legal almost everywhere except in a few European countries including the UK. The main animals from which fur is sourced are mink, fox, chinchilla and racoon.
The global skin trade is fairly niche but affects a wider range of animals than the fur trade. Exotic skins sourced include bison, snake, kangaroo, zebra and reptiles such as alligator. As with fur, some species are farmed intensively including iconic reptiles. These products tend to be confined to high-end fashion, for instance where a snakeskin handbag might cost $15,000. Some luxury goods companies have now a declared policy against the trade in skins including Burberry, Gucci, Versace, Armani, Calvin Klein, Paul Smith and Chanel.
Leather tanning and production is among the oldest of professions with the leather goods market having an estimated value exceeding $100bn.
The global industry produces around 18bn ft2 a year, and is today dominated by France, Italy and China – Italy being the global leader in finished leather goods (22% of world exports). The US is the leading exporter of raw hides at 28% of global trade. The process whereby raw hides are made into finished goods is ancient and intensive with the hide undergoing a multitude of cleaning, preserving, tanning and dyeing processes. Leather processing is environmentally intensive and toxic. Production is linked intrinsically with the meat industry, with JBS of Brazil, (among the world’s largest meat processors) also being a global hide trader, curing 28,000 cattle hides a day in the US alone.
Leather interiors are not confined to luxury brands. Practically all car manufacturers utilise cow hide for their leather interiors with an estimate that 30% of all leather produced goes towards car interiors, the majority of the remainder is made into shoes. However with awareness of the growing vegan market, nearly all major manufacturers now offer at least one model that is leather-free including Ford, Honda, Hyundai, Mercedes-Benz, Nissan, Tesla, Toyota and Volkswagen.
The UK is home to more sheep than any other EU country, and is the 8th largest producer of wool in the world, which is dominated by Australia with 25% of global production.
The wool industry produces around 1.1bn kg of wool from around 1bn sheep. Wool, despite the growth in synthetics, is still popular in clothing, carpets, and household furnishings as a versatile natural fibre. Greasy wool processing entails removing lanolin which is used in cosmetics, lip balms and waterproofing. Wool is a natural product and sheep are least likely to be subject to intensive farming; wool can be washed at lower temperatures than cotton or comparable synthetics and is promoted as an environmentally beneficial fibre that is not implicated in micro-plastic contamination. The International Wool Textile Organisation (the industry trade body) provides over 500 companies with animal welfare guidance through its sponsored Dumfries Declaration. Detractors, however, point to the cruel and artificial manipulation of sheep for their fleeces. Left alone, sheep would produce just enough wool for their needs and no more. They also point to mass sheering as being stressful and in many cases abusive, with instances of sheep being cut and injured as sheering is paid on volume.
Natural musk is a niche part of the perfumery industry used as ‘base notes’ or fixatives. Musk itself came originally from Musk deer which are trapped and killed for their secretive glands. Musk is also found naturally in civet cats, beaver and some water fowl. The Convention on International Trade in Endangered Species (CITES) effectively outlawed natural musk, but it survives in China where a musk pod might sell for $200-250. More widely, the cosmetic industry utilises a wide range of animal derived products including castoreum; guanine (fish scales); carmine/cochineal; ambergris; tallow; squalene; snail slime; lanolin; collagen; elastin; glycerine and glycerol; keratin and shellac.
What is EdenTree’s Approach?
The fur, skin and musk segments are niche with a limited investible universe. Mostly confined to the ultrahigh-end fashion market, most of these niches are under pressure, subject to boycott and in decline.
In our screened funds, EdenTree would not generally seek to invest where animals have been farmed for their fur or skin. The exposure to leather – largely a by-product of meat processing – would be more widespread across a range of industries, much of it fairly invisible. The main exposure might be retail (jackets, coats, belts, shoes etc.) and manufacturing where leather is a key component e.g. car seats or furniture.