Foreword

Less than a decade ago (in 2011 to be exact), we conducted a survey of institutional investors on their approach to farm animal welfare. The results were disappointing, to say the least.

Even among those fund managers managing ethical or screened (retail) funds, farm animal welfare had received relatively little attention other than in relation to animal testing of cosmetics and toiletries and the sale and marketing of fur products. We found very few examples of investor engagement with companies on farm animal welfare issues, with most of this engagement being reactive (e.g. in response to press stories on issues such as the accuracy of labelling and marketing claims or the public health and safety implications of farmed products. We found even fewer examples of farm animal welfare being integrated into investment research and decision-making.

We identified various reasons for this: The common perception that animal welfare was primarily an ethical issue, the perception that animals were adequately protected by legislation, a general lack of familiarity in the investment industry of farm animal welfare issues, a lack of publicly available information on how companies manage farm animal welfare issues, the perceived inevitable need for intensive farming practices in light of the need to feed ever growing global populations, and the perception that higher welfare animal farming practices result in higher financial costs for companies.

Fast forward almost a decade and the situation is completely different. Consumer interest in farm animal welfare and its relationship with food safety and food quality is at an all-time high. The relationships between farm animal welfare, supply chain resilience, product quality and food safety are clear. The business case and reputational case for taking a proactive approach are clear, and leading companies see no benefit in pulling back from this position.

The financial and ethical cases for investors to account for farm animal welfare in their investment research and decision-making is clear. 

With a growing body of institutional investors involved in both the BBFAW Investor Collaboration and Investor Statement – each representing £2.3 trillion in AUM – investors are sending a clear signal to food companies that institutional investors see farm animal welfare as a key business issue, and one that needs to be managed alongside other corporate responsibility issues. 

We are seeing this across the investment industry with many investors now using data from the Business Benchmark on Farm Animal Welfare (BBFAW) to identify leaders and laggards, to assess the quality of risk and supply chain management processes, and to identify investment opportunities. Many are also using the BBFAW to identify areas where companies may improve their performance and raise these issues in their engagement with companies.

This EdenTree Insight: Animals, Business & Investment vividly illustrates how animal production and animal welfare are inextricably linked with ethical, political, economic, environmental and social issues. Discussions about supply chain resilience, about the use of antibiotics, about food safety, about food quality, to name just a few, are intimately linked with the manner in which animals are treated. And, as this report shows, these issues are not confined to the food sector but are also relevant to industries such as fashion, textiles, upholstery, traditional medicine, animal health, entertainment, and pharmaceuticals.

Incidents such as the 2012 Horsegate scandal, exposés on inhumane animal treatment, the desire for locally sourced products, the growth in vegetarianism and veganism, and, most topically, the coronavirus pandemic, have all played important roles in getting us to this point. But we should not forget the critical role played by investors. Since the BBFAW’s inception in 2011, individuals such as EdenTree’s Neville White have championed farm animal welfare in the investment industry.

In fact, EdenTree’s involvement in the BBFAW Investor Collaboration and as a signatory to the BBFAW Global Investor Statement on Farm Animal Welfare since 2015 have resulted directly in many of the significant improvements we are seeing in corporate practice on farm animal welfare. 

With a growing body of institutional investors involved in both the BBFAW Investor Collaboration and Investor Statement – each representing £2.3 trillion in AUM – investors are sending a clear signal to food companies that institutional investors see farm animal welfare as a key business issue, and one that needs to be managed alongside other corporate responsibility issues.

There is , of course, much more to be done, not just in the food sector but across other industries that utilise animals. But the progress we have seen to date with food companies shows that great change can be delivered, and that investors can play a catalytic role in delivering change.

Nicky  Amos is Executive Director of BBFAW and Managing Director of Chronos Sustainability. 

 Dr Roy Sullivan is Expert Advisor to BBFAW and CEO of Chronos Sustainability. Together they are the editors of The Business of Farm Animal Welfare (Routledge, 2017).