Triodos actively engages with companies on many sustainability and socially responsible investment issues. Often we engage independently, but more and more we are engaging collaboratively because in many circumstances, we can thus exert more influence. It also means that engagement can be a more efficient process for us and for the companies we engage with. Regarding animal welfare, Triodos is involved with several platforms.

Business Benchmark on Farm Animal Welfare

The Business Benchmark on Farm Animal Welfare (BBFAW) was established in 2012 as a result of the growing interest in farm animal welfare, especially in relation to food scandals, tightened regulation, and investor concerns about supply chain management and risk. The BBFAW has established itself as a catalyst for influencing change in corporate practices on animal welfare management and reporting. Its benchmark tool measures company performance on farm animal welfare, thus enabling comparison of the world’s leading stock-listed companies. The tool has become an important way for investors to evaluate the relative performance of food companies on farm animal welfare management and disclosure. The benchmark is based on six tiers (with Tier 1 being leaders), and rates companies on how integral animal welfare is to a company’s business strategy, and to what extent it leads or lags.

The methodology behind the BBFAW benchmark is very comprehensive and detailed. In line with our own engagement and findings, the 2015 benchmark found substantial improvement at Compass Group and Whitbread: both improved and are now rated Tier 3, while Metro AG improved to Tier 4. J Sainsbury, which remained at Tier 2 was already a top performer with regard to animal welfare. Carrefour and Starbucks both stayed in Tier 5. Both companies are working on new policies and programmes and we therefore expect them to improve ratings in the next update. Whole Foods Market and Colruyt are yet to be included in the benchmark.

Long-term value creation

In May 2016, Triodos and 17 other institutional investors representing £1.5 trillion in assets under management, collaborated to create the Investor Statement on Farm Animal Welfare . In the signed statement, the investor group expresses its belief that farm animal welfare is an important factor in long-term value creation, and committed to take farm animal welfare into account during investment decisions and to encourage high standards across the food industry.

Farm Animal Investment Risk and Return

Farm Animal Investment Risk and Return (FAIRR) is an investor initiative that aims to put animal welfare on the Environmental, Social and Governance (ESG) agenda. Its members believe that a worrying knowledge gap has grown among investors in relation to the material investment risks and opportunities connected with intensive livestock farming and poor animal welfare standards. The FAIRR works as knowledge and engagement network in close cooperation with ShareAction , a responsible investment charity that uses the investment system to bring positive change and increase awareness amongst investors and companies. The scope of FAIRR is broader than BBFAW, and attention is paid to all impacts of intensive livestock farming, including climate change and land use. Triodos supports relevant engagement initiatives of FAIRR.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.