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The Business Benchmark on Farm Animal Welfare
Doppelte Dividende – Trends in Nachhaltigen Investment 21 Oktober 2014, Frankfurt
Nicky Amos, Programme Director and Rory Sullivan, Expert Advisor
About the Benchmark
• World’s first benchmark of leading food
companies on their management of farm animal welfare standards
• Designed to help drive higher farm animal welfare practices across three food industry sectors:
• Retailers • manufacturers and processors • Restaurants and bars
• Compassion in World Farming and World Animal Protection provide technical expertise and guidance on farm animal welfare and related issues, funding and resources.
About the Benchmark
The Benchmark aims to provide: § Investors and other stakeholders with
independent, impartial and reliable information on individual company efforts to adopt higher farm animal welfare standards and practices
§ Companies with guidance on how they can
effectively communicate their performance on farm animal welfare to key stakeholders
Summary of engagement – 2011/12
October 2011 Programme
launched at UK Social Investment
Forum Seminar hosted by Henderson
Global Investors. Speakers from CIWF,
Unilver, M&S and Henderson)
February 2012 Article published in
Ethical Corporation (first of four in 2012)
March 2012 Webinar hosted by
PRI with 40 registered
investment-related organisations (asset
managers and research houses).
Speaker from Sainsbury.
June 2012 Public consultation
on Benchmark criteria and
methodology
July 2012 Roundtable hosted by Co-operative
Asset Management
October 2012 Article published in
Responsible Investor journal
November 2012 Dialogue with
Business for Social Responsibility, USA
Summary of engagement – 2013/14
May-July 2013 One-to-one meetings with investors in UK, France, Belgium
July 2013 Meeting with
Delhaize Group, Brussels
Jun-July 2013 Public consultation on Benchmark criteria and
methodology
October 2013 Article on corporate
disclosure published in
Guardian Sustainable
Business
December 2013 Launch of 2013
Benchmark Report Launch hosted by BNP Paribas Bank in
Paris
December 2013 Various articles on 2013 Benchmark
results
Feb 2014 Webinar on regulatory
landscape for farm animal welfare
June 2014 Presentations at
Responsible Investor conference
and Good Farm Animal Welfare Forum, London
March 2014 Roundtable event, London, hosted by
UKSIF & Aviva
The Universe of Companies (2013)
• 70 companies evaluated (68 in 2012)
• Broadly the same universe of companies as 2012, but updated to reflect ownership changes
• 12 countries across 3 regions (Europe, North America and South America
• 61% (43) companies are publicly listed, 23% (16) are privately-owned and 11% (8) are co-operatives (with the remainder being joint- or private equity-owned)
Food Retailers and
Wholesalers 33% Restau
rants and Bars 30%
Food Produc
ers 37%
Scope of Evaluation Criteria
• 18 questions (17 in 2012) • 3 categories:
• Management commitment & policy (65 points)
• Governance and management (85 points) (75 points in 2012 Benchmark)
• Innovation & leadership (30 points)
• Max score: 180 points (170 points in
2012 Benchmark)
German companies (with tier ranking): Aldi Nord (6) Aldi Süd (5) Kaufland (5) Lidl (5) Metro (5) Rewe Group (4) Müller Group (6) Edeka Zentrale* * from 2014
Overall Results (2013)
Key Findings (2013)
• 71% of food companies acknowledge farm animal welfare as a business issue
• 56% publish an overarching policy on farm animal welfare • Companies are relatively unclear about their positions on key welfare
concerns • Only 39% of companies describe their board/senior management
oversight of farm animal welfare • Reporting on farm animal welfare performance is the exception rather
than the rule • Beyond their own operations, there are few examples of how companies
are contributing to the wider debate on FAW.
Leading Companies (2013)
Tier Number of Companies
Companies
2012 2013
1 0 2 Co-op Switzerland, Marks & Spencer 2 3 6 Co-op (UK), J Sainsbury, Marfrig, Noble Foods,
Smithfield Foods, Unilever 3 6 9 Arla Foods, FrieslandCampina, McDonalds, Migros,
Morrisons, Nestle, Tyson, Vion, Waitrose 4 17 16
5 19 14
6 23 23
In summary
• There is clear evidence that farm animal welfare is rising up the business agenda
• 19 of the 70 companies have moved up at least one tier • First signs of companies demonstrating leadership in this area which will
provide the impetus for other strong performing companies to aim higher • However:
• While over 70% of companies acknowledge farm animal welfare as a business issue, only 56% have formal policies and just 39% describe management oversight
• Overall average score of 28% [2012: 23%]suggests some modest improvements, but there is still a long way to go
Key Developments: 2014 Benchmark
• Four significant changes were made to the 2014 Benchmark:
1. The addition of 10 new companies (BRF SA, Costco Wholesale Corp, Darden Restaurants Inc, Domino’s Pizza, Edeka Zentrale, Ferrero SpA, General Mills Inc, JBS SA, The Kroger Company, The Wendy’s Company)
2. The addition of a number of questions on performance including: § the proportion of animals free from confinement § the proportion of animals subject to pre-slaughter stunning § the proportion of animals transported within 8 hours journey time § Specific welfare outcome measures
3. The expansion of scope to include finfish aquaculture alongside terrestrial animals
4. The addition of a new question on the prophylactic use of antibiotics
2014 Benchmark Schedule
Company Evaluations
80 assessments completed/quality assured/proof-read Technical review by NGO partners Preliminary reports shared with companies Reports finalised
Company & Investor Engagement
One-to-one meetings with companies (ongoing) One-to-one meetings with investors (ongoing) Oekom research conference: 'Doppelte Dividende', Frankfurt, 21 October 2014 Good Farm Animal Welfare Forum, Paris, 6 November 2014
2014 Benchmark Report/Launch
Media Planning Report drafting Draft report shared with partners Report finalised & signed off Report designed and printed Launch (Germany, January 2015)
Tools for Investors
How Are Investors Using the Benchmark?
• To assess the business risks and opportunities of farm animal welfare for companies.
• To provide insights into how effectively companies are identifying and managing risks in their supply chain processes more generally.
• To cross-check their assessments of companies’ sustainability approaches and strategies.
• To prioritise companies for engagement, both laggards (i.e. poor
performers) and leaders (to understand what has enabled these companies to become leaders).
• To inform their engagement with companies, both on farm animal welfare and on sustainability strategy and governance.
• To raise questions at Annual General Meetings.
Wider Reflections
• Reporting on farm animal welfare is in its infancy, with progress hampered by a lack of a shared understanding of what performance reporting might look like.
• From an investment perspective, the key conclusions are that farm animal welfare is a systemic risk to the food industry and that food companies have yet to effectively engage with the issue.
• Encouragingly, a number of companies have already started to use the Business Benchmark framework to strengthen their approach to the management of farm animal welfare.
• We anticipate greater engagement of companies and investors as the Benchmark is repeated year on year.
For further details please visit website www.bbfaw.com or contact the Programme Director, Nicky Amos [email protected]