WHO CARES WINS: RELAUNCHED ANIMAL WELFARE BENCHMARK IS VITAL YARDSTICK FOR INVESTORS

WHO CARES WINS: RELAUNCHED ANIMAL WELFARE BENCHMARK IS VITAL YARDSTICK FOR INVESTORS

By Nicky Amos, Executive Director of BBFAW and Managing Director, Chronos Sustainability

Animal welfare is not just an issue that affects the lives of the world’s 92 billion farmed animals. It also affects the viability of food sector supply chains and the long-term returns of investors in the food sector.

Poor farm animal welfare can lead to food recalls, consumer backlash and greater disease or pandemic risk. To quote Abigail Herron of Aviva Investors, “Critical issues including animal welfare and antimicrobial resistance, present material financial risks to companies and shareholder returns”.

That is one of the main reasons over 100 stakeholders will gather at the London Stock Exchange today to discuss the relaunch of the Business Benchmark on Farm Animal Welfare (BBFAW). The benchmark, first published in 2012, is the leading global measure of farm animal welfare management, policy commitment, performance and disclosure in food companies – and is powered by research undertaken by the Chronos Sustainability team.

BBFAW ranks 150 global food producers, including the likes of McDonalds, Tesco and Tyson Foods, and this year introduced tougher assessment criteria with a greater focus on how companies deliver welfare performance.  It is supported by partners Compassion in World Farming and FOUR PAWS, and by a $2.3 trillion coalition of institutional investors who will engage with the companies in the year ahead to drive improvement.

Lot done, much still to do.

BBFAW is a huge undertaking and the full report can be found here. I can’t do justice to all the findings in this short blog but there are two key conclusions I’d like to reflect on.

The first, is the sector’s clear recognition of farm animal welfare as a material, as-well as moral, issue. 95% of benchmarked food companies recognise ‘farm animal welfare’ as a core business issue, up from 79% in 2012.

Alongside this are clear pockets of leadership and good practice. Three firms (Marks & Spencer, Premier Foods, Waitrose) achieved ‘Tier 2’ status, demonstrating that farm animal welfare is integral to their business strategy, and one in four firms recognised the need to reduce reliance on animal sourced foods – a new section of the benchmark that reflects the reality of maintaining high welfare standards in a world of decreasing natural resources.

It's also encouraging to see high levels of ambition on cage-free eggs, with 73% of the 141 companies that have eggs in their supply chains now having cage-free egg commitments.

Second however, is that despite the positive foundations it’s equally clear that the sector must do more to demonstrate ‘Performance Impact’ i.e. showing the actual welfare benefits for farm animals in their global supply chain.

In total 93% of companies rated as ‘E’ or ‘F’ on ‘Performance Impact’ (the bottom two rankings based on their scoring across 20 performance impact questions), and no firm achieved the top ‘A’ or ‘B’ impact rating. Digging into this we can see the need for faster progress on issues such as close confinement (i.e. transitioning animals out of cages and high stocking densities) and reducing the proportion of animals that are subjected to routine mutilations (e.g. tail docking of pigs and cattle).

For example, a majority of companies assessed (52%) still have no policy to manage routine mutilations, and 18% of benchmarked firms, including US giants like WH Group, the largest pork company in the world, have no policy commitment to end the use of close confinement systems such as ‘sow stalls’ or ‘gestation crates’.

One especially stark finding is that only 9% of companies with pigs in their supply chain have set credible targets to end the use of sow stalls or gestation crates.  Gestation crates are metal enclosures barely bigger than an adult pig which are banned in jurisdictions such as the UK, Sweden and several US states.

A new baseline

There is no doubt that BBFAW’s adjusted assessment criteria this year is tougher. But the early feedback shows this is a welcome step in helping the benchmark drive higher standards in the world’s leading food businesses. That’s good news, not just for farm animals, but for companies, investors and consumers too.

More information on the programme can be found at www.bbfaw.com