Animal welfare on risk management radar

by Erica Shaffer
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DECATUR, Ga. – Broad-based adoption of animal welfare policies remains in its infancy, but more food companies and their investors are paying attention to animal welfare and humane handling issues, according to the 2015 “Business Benchmark on Farm Animal Welfare” (BBFAW).

The BBFAW measures farm animal welfare management, policy commitment and disclosure on the part of food companies. The 2015 report found that many companies have not yet established systems for managing, measuring and reporting on farm animal welfare when compared to other corporate responsibility issues.

“While 85 percent of the companies covered by our assessment acknowledge farm animal welfare as a business issue, only 69 percent have formalized their commitment in overarching policies or equivalent documents, 54 percent have published farm animal welfare-related objectives and targets and 51 percent have described their management responsibilities for farm animal welfare,” the report states.

But that’s changing given the rising proportion of companies in the Benchmark that publish animal welfare policies — 69 percent in 2015 up from 46 percent in 2012. “From our discussions with leading companies in the Benchmark, it is clear that they see farm animal welfare both as a business risk to be managed and as a source of competitive advantage,” the report noted. “Within this, customer and client demand are the most important drivers for action.”

Also driving action are institutional investors who are paying more attention to animal welfare as part of their due diligence and in their engagement with companies.

“In relation to engagement, we have seen a striking increase in the willingness of investors to engage with companies to encourage them to improve their practices and reporting on animal welfare,” the report said.

The 2015 review includes 90 companies encompassing three areas: food retailers and wholesalers, restaurants and bars, and food producers. Donnie Smith, president and CEO of Tyson Foods, wrote the foreword to the report.

Published since 2012, the BBFAW was developed to encourage higher standards for farm animal welfare across the food industry. Developers of the report also hope to educate investors about the business implications of animal welfare for the companies in which they are invested. Compassion in World Farming, World Animal Protection and investment firm Coller Capital collaborated on the report.

View the full report here.
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