It’s estimated that more than 115 million animals are experimented on each year. From testing disease treatments to cosmetics and household product safety, it can be a painful experience, and many are euthanised afterwards.
HL investors are split on the issue. In our December 2025 Sustainable Investor survey of 2,000 clients, 50% of respondents said they were uncomfortable investing in companies conducting animal testing, while 39% said the opposite. The rest were undecided.
So, we’re delving into animal testing. Why it’s used, what standards are in place to protect animals and the alternatives, before exploring the options for investors.
This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest.
Pharmaceutical vs non-pharmaceutical animal testing
For many, there’s a big distinction between animal testing for medical and non-medical purposes. Experiments using live animals have led to the discovery of critical insights into biology and disease.
Insulin therapy for diabetics, antibiotics, the polio vaccine, and the Covid-19 vaccines are just some of the medical breakthroughs achieved through animal testing. And there’s overwhelming scientific consensus worldwide that at least in some cases, animals are still needed to make medical progress.
But what about animal testing that’s not saving lives?
Animal testing for cosmetics is largely banned in the UK and the European Union (EU).
In the EU, it’s illegal to market or sell cosmetic products where the final formulation or ingredients were newly tested on animals for cosmetics purposes. The UK retained similar rules after Brexit. However, animal testing can still occur in limited circumstances under chemical safety regulations. Several countries outside Europe have introduced similar bans or restrictions.
But that’s not the case everywhere. In the United States, there’s no nationwide ban on cosmetic animal testing, although a small number of states have done so. In China, despite some regulatory reform, certain cosmetics like hair dyes and sunscreens are subject to stricter requirements, and animal testing may still be required before they can be sold.
Is animal testing the only option?
There are thousands of products already on the shelves made with ingredients that have a long history of safe use, meaning no additional testing is needed. Companies can rely on these established ingredients to ensure product safety.
Where new testing is required, the science has moved on significantly. Today, companies can often use non‑animal methods like computer modelling, cell‑based studies and reconstructed human tissue. These approaches can enable more accurate prediction of how ingredients behave in the human body.
Recent advances are accelerating this shift. Artificial intelligence (AI) is being used to analyse data and predict toxicity, while “organ‑on‑a‑chip” technology recreates miniature human organs using living cells, allowing scientists to observe how substances interact with human‑like systems in real time.
In some countries though, regulation hasn’t caught up with technological advancement, and companies are still required to test cosmetic products on animals.
Case study – Unilever
Consumer goods giant Unilever has been pioneering the development of non-animal methods of testing for 40 years.
Occasionally, across Unilever’s portfolio of brands, some suppliers must conduct animal testing to comply with regulation in certain markets. But Unilever do not agree that animal testing is necessary to make sure products are safe, and the company supports calls for a worldwide ban on animal testing in cosmetics.
It regularly presents its work publicly and collaborates with organisations globally to share knowledge about assuring product safety in a way that doesn’t involve animals.
What are the options for investors?
Lots of people know it’s possible to shop ‘cruelty free’ to avoid products that were tested on animals. But many do not know it’s possible to reflect your views on animal testing in your investments too.
It’s important to understand the detail, however, as different funds can have very different approaches to animal testing and related ethical issues. We look at two ethically invested funds in more detail below.
Investors should also note that the exclusions applied by these funds mean their portfolios can look very different to the broader stock market. So their performance can vary.
Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the risks and charges of a fund before they invest and make sure any new investment forms part of a long-term diversified portfolio.
Aegon Ethical Equity
Audrey Ryan has managed the Aegon Ethical Equity fund for more than 25 years. She aims to identify and understand the key environmental, social and governance (ESG) risks of each company, industry and sector she invests in. Ryan believes companies that lead the way in governance and sustainability can outperform over the long run.
The fund uses a strict exclusions-based approach. It won’t invest in companies involved in activities deemed unethical, from tobacco and alcohol producers to munitions manufacturers and banks with significant exposure to third-world debt.
Crucially, the fund also avoids companies that provide animal testing services, or that sell animal-tested cosmetics or pharmaceuticals.
And it applies several other animal-related exclusions as well. Exclusions like companies involved in intensive farming, companies that operate abattoirs or slaughterhouses and companies that produce or sell meat, poultry, fish, dairy or slaughterhouse by-products.
Investors should note the fund’s investments in smaller companies add risk.
Janus Henderson UK Responsible Income
Janus Henderson UK Responsible Income aims to give a good level of income, alongside capital growth over the long term. Andrew Jones has been at the helm since January 2012 and has over 20 years’ experience managing UK Equity Income funds.
His investment process starts with a screen which excludes companies involved in areas some investors consider unethical. He also excludes companies that aren’t compliant with the UN Global Compact (a United Nations pact on human rights, labour, the environment and anti-corruption).
The fund doesn’t invest in companies that make vitamins, cosmetics, soaps or toiletries, unless it’s clear their products and ingredients are not animal tested. It will invest in companies that use animal testing for medical purposes, if the company is committed to demonstrating best practice in line with a set of guiding principles, called the ‘Three Rs’:
Refine experiments to ensure suffering is minimised
Reduce the number of animals used to a minimum
Replace animals with alternative techniques where possible
Investors should note that like Aegon Ethical Equity, the manager’s flexibility to invest in smaller companies adds risk.
Interested in Responsible Investing?
Our Responsible Investment Hub includes helpful information on how to invest responsibly, fund ideas and more.