Money where your mouth is? Investor-backed report finds food leaders failing on animal welfare

26 Apr 2024 --- Global food companies now recognize farm animal welfare as a core business issue but have generally failed to deliver meaningful change. The Business Benchmark on Animal Welfare (BBFAW) has ranked 150 leading food companies on animal welfare and given the vast majority a poor performance impact rating. 

The relaunched BBFAW Report introduces tougher criteria with a greater focus on how companies deliver welfare performance. According to BBFAW, a US$2.3 trillion investor coalition is set to engage with food companies about the results.

“Investors use the BBFAW Report as a tool to evaluate the relative performance of investee companies on their management of business risks and opportunities presented by farm animal welfare. Of course, animal welfare is one of many ESG issues evaluated by investors, but it will be an important and potentially material issue for investors that have food sector companies in their portfolios,” Nicky Amos, BBFAW’s executive director, tells Food Ingredients First.

“Specifically, investors use the insights from the BBFAW to support their decision-making processes and their company engagements as part of their stewardship obligations. For instance, investors in the BBFAW Global Investor Collaboration engage with companies in the BBFAW by writing to the CEO of every company covered by the benchmark to signal their support of the BBFAW and encourage companies to adopt the company-specific recommendations arising from the benchmark evaluations.”

Investors can also request a summary of an individual company’s BBFAW assessment to help them prepare for meetings with a company, including a company’s AGM.

“Finally, investors may decide to engage with companies collaboratively — this involves investors joining together to highlight concerns about a company’s poor animal welfare performance and seek reassurance from a company that it is taking the necessary steps to address systemic issues that are contributing to poor welfare performance,” adds Amos.

Slow progress
Some 95% of global food companies now recognize “farm animal welfare” as a core business issue, with Marks & Spencer, Premier Foods and Waitrose as the highest-ranked companies. However, no company has achieved Tier 1 “Leadership” status in the BBFAW rankings.

Meanwhile, 93% of companies were given a poor “E” or “F” rating for “Performance Impact” — a measure of whether farm animals in their supply chains are protected from cruel practices such as close confinement or routine mutilation.The vast majority of global food companies have committed to improving animal welfare standards, but few have achieved meaningful progress.

Major food companies, including Mars, Mondelēz International, Starbucks, Target and Walmart, were categorized as Tier 6 — “No evidence on the business agenda.”

Nineteen global food companies, including Domino’s Pizza (US) and Yum China Holdings (the owners of KFC in China), have yet to publish a formal farm animal welfare policy.

According to Amos, there are two main reasons why companies have failed to achieve performance progress on animal welfare despite their pledges. First, delivering progress on stated policy commitments and targets takes time and investment.

“Progress relies principally on companies having effective governance processes in place as well as the proper engagement of internal and external stakeholders,” he explains.

“For instance, senior managers need to be engaged in order to allocate the necessary resources to driving progress, operational managers need to be charged with implementing commitments through action and suppliers and business partners need to be engaged, as they play an integral role in delivering performance improvements.”

Second, achieving welfare improvements in global supply chains is complex, and certain structural barriers can hamper individual companies’ progress.

“For instance, a lack of approved broiler chicken breeds that are bred for improved welfare potential and slower growth can limit companies’ progress toward the Better Chicken Commitment or European Chicken Commitment, and a lack of cage-free eggs in regions such as the Middle East can hamper companies’ progress toward achieving global cage-free egg sourcing,” says Amos.

The report found generally high levels of ambition for cage-free eggs, with 73% of the 141 companies that have eggs in their supply chains now having cage-free egg commitments.
Only 9% of companies with pigs in their supply chain have set credible targets to end the use of “gestation crates” (Image credit: Compassion in World Farming).

However, only 9% of companies with pigs in their supply chain (13 of 137 companies) have set credible targets to end the use of “sow stalls” or “gestation crates” — metal enclosures barely bigger than an adult pig, which are banned in jurisdictions such as the UK, Sweden and several US states.

Meanwhile, 52% of companies have no policy to manage routine mutilations, such as branding with hot irons or tail docking in pigs and cattle, and only 27% of assessed companies report that live transportation of farm animals is restricted to short journeys.

Also, only 40% of companies have commitments in place to end prophylactic and routine metaphylactic antibiotic use, despite the risk of surging antibiotic resistance.

Regulators and consumers
According to BBFAW, animal welfare laws and regulations have an important role to play in setting minimum requirements for companies. However, such legislation varies significantly across markets, is not consistently applied to all species or welfare topics and not consistently enforced.

“For companies operating across global markets, a lack of universal legislative standards means that there are wide variations in the standards expected of companies — this is why companies are encouraged to formalize their animal welfare commitments in a policy statement that extends beyond minimum legislative requirements in specific geographies and is universally applied across all markets in which the companies operate,” Amos tells us.

Meanwhile, consumers and business customers play a hugely important role in signaling their interest in, or concern for, animal welfare.

“Companies indicate that consumers or customers are a principal driver for managing the welfare of animals in their operations and supply chains (alongside other drivers such as legislation, investor interest, NGO pressure, the BBFAW and peer pressure,)” continues Amos.The BBFAW Report evaluated how companies recognize the need to reduce reliance on animal-sourced foods and diversify into alternative proteins.

“However, consumers have limited understanding of animal production systems and the welfare issues inherent in these systems. Therefore, companies have an important role to play in educating consumers and helping them to understand what actions the companies are taking to improve the welfare of animals under their care.”

Alternative protein
The latest BBFAW Report introduced tougher assessment criteria and an increased focus on “Performance Impact,” including new questions on how companies recognize the need to reduce reliance on animal-sourced foods and diversify into alternative proteins.

A new section of the assessment found that 25% of benchmarked companies recognize the need to reduce reliance on animal-sourced foods as a relevant business issue, with 21 companies, including Carrefour, Sodexo and Greggs, publishing time-bound targets to reduce reliance.

BBFAW was originally launched in 2012 and remains the leading global assessment of companies’ farm animal welfare policies and practices. It is supported by partners Compassion in World Farming and Four Paws and a coalition of institutional investors.

In related news, animal protection groups have urged the EU to halt livestock exports by sea after a report revealed around half of approved carriers pose a high risk to the welfare of the animals and crew on board.

By Joshua Poole