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What does ethical investment mean when it comes to farm animal welfare?

If you are a consumer who cares about the welfare of farm animals, you will probably be purchasing higher welfare food. But, if you are an investor, and interested in animal welfare, do you seek out businesses or farm animal production systems that aim to achieve high levels of animal welfare? Ethical, or responsible, investment has seen unprecedented growth in recent years, with a key driver being consumers wanting to support investments that align with their personal values (RIAA 2017). Responsible investment represents around half of all professionally managed assets in Australia with 9 in 10 Australians saying they do not want to invest in animal cruelty (RIAA 2017).

What is ethical or responsible investment?

Responsible investment is a strategy that considers environmental, social, and governance (ESG) factors as well as ethical issues to help manage the risk of investing in a particular business. For example, poor animal welfare is a risk to good business so responsible investors in farm animal production (raising animals for food) can choose to pull out or they can use their influence to help improve animal welfare.

What is in it for corporates and investors?

There is a competitive advantage to prioritising animal welfare. According to the International Finance Corporation (IFC 2014), a member of the World Bank Group, businesses that address animal welfare:

  • reduce losses and increase productivity: e.g. improved human-animal relationships and other welfare benefits can reduce costs and lead to increased productivity;
  • access new markets: e.g. market opportunities for food produced to higher welfare standards in certified systems; and/or
  • gain brand reputation: e.g. by becoming the producer of choice for retailers and consumers concerned with animal welfare.

Investors need company disclosure on animal welfare commitments

For businesses, it is important to disclose information on animal welfare and other ESG commitments as well as performance against those commitments. When companies are assessed for or by potential investors, a lack of information on animal welfare and other CSG commitments will result in a poor assessment and low ranking because it is assumed animal welfare and/or other ESG issues are not managed. For example, the Business Benchmark on Farm Animal Welfare (BBFAW 2018) will publish an annual desktop study on corporate commitments relating to farm animal welfare and report on progress against those commitments. Corporations that have no or very little information available publicly are scored low on the benchmark even if they are doing good things for animal welfare on the ground.

What is the RSPCA doing to encourage investors to help improve the welfare of animals raised for food?

  • RSPCA Australia engages with corporations, banks and other investors to highlight material issues for each livestock industry.
  • We encourage investors to support businesses that include the aims of the Five Domains in their animal welfare commitments or policies:
    • Nutrition: To maximise eating as a pleasurable experience and to minimise thirst and hunger
    • Environment: To promote thermal, physical and other comforts and to minimise discomfort and exposure
    • Health: To promote the pleasures of robustness, vigour, strength and well-co-ordinated physical activity and to minimise breathlessness, nausea, pain and other aversive experiences
    • Behaviour: To promote engagement in rewarding activities and minimise threats and unpleasant restrictions on behaviour
    • Mental state: To promote various forms of comfort, pleasure, interest, confidence and a sense of control.
  • We encourage investors to support businesses that have animal welfare commitments or policies that cover key areas of livestock production (as described in IFC 2014): genetics and breeding, animal health, husbandry practices, stockmanship, feed and water, housing systems, transport and slaughter.
  • We provide investors with information regarding quality assurance programs that encompass animal welfare.
  • We highlight the importance of company disclosure of animal welfare commitments or policies.
  • We highlight the importance of management systems and assessment of performance against those systems; for example, how companies manage their supply chains to ensure they are meeting animal welfare policies (and specific animal welfare standards).
  • We provide and offer assistance in developing animal welfare protocols.

What can you do?

If you are an investor interested in animal welfare, we encourage you to seek out businesses or farm animal production systems that aim to achieve high levels of animal welfare and who meet their stated commitments to improve farm animal welfare. Wondering where to start? Find out more here and check out the Business Benchmark on Farm Animal Welfare.

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Updated on May 9, 2019
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https://kb.rspca.org.au/knowledge-base/what-does-ethical-investment-mean-when-it-comes-to-farm-animal-welfare/

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