An Introduction to the Report

The sixth annual Business Benchmark on Farm Animal Welfare (BBFAW) was released February 22, 2018.  This report is supported by founding partners, Compassion in World Farming and World Animal Protection, both animal activist organizations, and Coller Capital, a global private equity fund with an estimated $17 billion in assets under management.  As a risk mitigation strategy, this equity firm actively seeks investments in companies categorized as having high animal welfare standards.

The report assesses 110 food retailers, manufacturers, and restaurant/bars, with headquarters in 18 countries, that utilize production animals as a significant business component.  Though approximately 30% of the companies assessed are headquartered in the U.S., the report has a European focus with nearly 55% of the companies, as well as the two activist groups headquarters, are located in the E.U.  The assessment mentions several notable companies including: Perdue Farms, JBS, Hormel Foods, Mondelez, General Mills, Compass Group, Costco, and Target.  All companies are ranked in one of six tiers, with tier one being the best and tier six representing no evidence of animal welfare standards on the business agenda.

Report Analysis

Transparency

The report provides information on the organizations that sponsor the BBFAW and detail the criteria they deem as important for animal welfare and corporate animal welfare programs. While the BBFAW report is designed to give an appearance of transparency, the complete report is not available to the public.  UEP’s VP of Animal Welfare, Dr. Larry Sadler, requested the report and was denied.  The stated reason for the denial was that the reports are confidential and only for the company to which they refer, or for the investor community for research purposes.

Standards

The standards are set per the activist groups’ agendas and do not necessarily reflect the science, practical knowledge, or expertise inherent in corporate social responsibility.

Data Assessed

All companies assessed are asked to complete lengthy documents, with much of the requested information considered confidential.  If a company chose not to complete the documents, BBFAW utilized publicly available information.  Because the scoring is done on an incomplete basis, it is unlikely a company will be placed in the correct tier.  In addition, the report only assesses those polices and statements a company has on paper, not the actual processes in place.  As such, a company with a document saying it cares and is concerned about an issue may receive a better score than a company that has practices higher standards.

BBFAW and Eggs

Seventy-nine percent of the companies assessed have a public commitment related to close confinement.  Many have made a commitment to purchase eggs from cage-free systems, up 49% from 2012.  The 2017 BBFAW specifically scored companies based on the percentage of cage-free eggs reported purchased.  Ten points were allocated for companies which purchased all cage-free eggs out of 270 possible points.  Forty-four companies reported on hen housing, with ten of the companies reporting they only utilize cage-free eggs.

Forty-four percent of the assessed companies have commitments related to physical modifications, for which the summary notes the majority are related to beak trimming, which is a five-point question.

The report also mentions outcome-based measures, correctly identifying them as the “most important species-specific measures”.  Unfortunately, reporting on such measures is only worth five points.

Why the Report Matters

Many in the U.S. are just now becoming familiar with these reports, and so their relevancy may be lost. This year the report received relatively little attention, which can be explained by President Trump’s domination of the media and other factors.  Regardless of the reason, animal welfare discussions and focus have decreased but it is unlikely this is a permanent change.

The report has historically received significant attention in Europe, with the media covering and expanding on the topics and the public inquiring.  Even if this report never becomes popularized in the U.S., the pressure from Europe can, and has, compelled companies to react and adjust their corporate standards to receive a better score.

Though the BBFAW is not entirely objective, there are no other assessments of corporate welfare; this tool is the only guide investors and consumers have for assessing a company’s welfare standards. It is likely at least some companies listed will continue to work towards the standards established by these activist groups. This could lead to troubling changes, such as the adoption of corporate policies against beak trimming, which may come at the cost of hen welfare based on outcome-based measures.

Absent another report, egg suppliers must work to explain and educate their customers on these topics.  Without this education, many companies are left relying on the standards established by the BBFAW.