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February 14, 2015
Corporate Responsibility for Farm Animal Welfare Benchmarked
    by Robert Kropp

Business Benchmark on Farm Animal Welfare aspires to improve living conditions for animals raised for food by benchmarking corporate performance on farm animal welfare.


Attendees on both sides of the table in shareowner engagement stand to benefit from the benchmarking of corporate performance on environmental, social, and corporate governance (ESG) issues. Investors can gauge the comparative performance with their peers of companies in their portfolios; the companies themselves, meanwhile, can discern financial and reputational risks if they lag behind others in their industry sectors.

ESG-related risks and opportunities are numerous, and major crises such as climate change tend to dominate the shareowner resolutions filed by sustainable investors. Issues such as animal welfare receive considerably less attention; during the 2014 proxy season, according to As You Sow, a few resolutions addressed issues such as the use of pig gestation crates and the use of animals in product testing. A resolution commending Kraft Foods for discontinuing the use of pig gestation crates gained 81% of shareowner votes.

The 2015 Proxy Resolutions and Voting Guide published recently by the Interfaith Center on Corporate Responsibility (ICCR) lists but one resolution addressing the treatment of animals: filed with McDonald's, it requests that the use of antibiotics be limited to veterinarian-diagnosed illness.

Despite the relatively low profile of animal welfare issues, a benchmark does exist, thanks to the UK-based Business Benchmark on Farm Animal Welfare (BBFAW). For the third consecutive year, BBFAW has produced a report that benchmarks many of the major corporations engaged in food production. The 2014 report includes 80 companies.

“The practice and reporting of farm animal welfare, relative to other corporate responsibility issues, remains in its infancy,” the report states. While an overwhelming number of the companies benchmarked acknowledge animal welfare as a significant business issue, less than two-thirds of them have published policies addressing it. “Furthermore, some 59% of companies fail to describe management responsibilities for farm animal welfare, and only 33 companies (41%) publish farm animal welfare-related objectives and targets,” the report continues.

The 64% of companies that now have a policy on animal welfare actually represents a fairly significant improvement over the previous benchmarks; in 2012, only 46% of companies had such policies in place. However, board and senior management oversight remains essentially unchanged, as does the reporting of objectives and targets. Overall, ten of the 80 companies are ranked in the top two tiers by BBFAW, which are reserved for those companies for which the issue is integral to their business strategies.

Forty companies occupy the bottom two tiers of the benchmark, indicating little evidence if any of implementation. “We are particularly concerned that most of the companies in Tier 6 and Tier 5 do not appear to have taken action to improve their management of farm animal welfare-related risks and opportunities, nor have they signalled that they intend to do so,” the report states. “We encourage investors to engage with these companies so that they can better understand the characteristics of good and best practice on farm animal welfare.”

“There is a need to create real demand in the investment system for research on farm animal welfare, demand for investors to use their influence with the companies in which they are invested, and demand for investors to consider farm animal welfare in their investment research and decision-making processes,” the report continues.

Report co-author Dr. Rory Sullivan said, “A lack of consensus on the performance data that needs to be reported - across species, across geographies and across products - means that companies are unclear about what information they should be reporting. But companies expect to face greater customer and NGO pressure to report on performance measures, and many welcome steps by the BBFAW from 2014 to start introducing performance-based criteria.”

BBFAW Program Director and report co-author Nicky Amos added, “We know that companies can only report on their performance if they are properly managing it, and it is the vital first step to ensuring that companies are accountable for their farm animal welfare practices and performance.”

 

 
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