November 14, 2024
Webinar recording [English] HERE
Grabación de seminario web [Español] AQUÍ
Ghi âm hội thảo trên web [tiếng Việt] ĐÂY
View additional supporting material below.
Humane Society International and IFC advocate for farm animal welfare in financing policies
Humane Society International (HSI) and the International Finance Corporation (IFC) cohosted a webinar titled “Integrating farm animal welfare into financing.” The event aimed to highlight the often-overlooked issue of farm animal welfare in financial institutions' policies, practices, and procedures, emphasizing the material risks of neglecting this critical area.
Financial institutions and investors that follow IFC’s Performance Standards and Practices should incorporate animal welfare into their financing activities.
HSI’s presentation: “Ignoring animal welfare can have risk and return implications”
Jackie Groberski, CFA, Senior Program Manager for Corporate and Financial Institution Engagement at HSI, discussed how farm animal welfare aligns with global ESG (Environmental, Social, and Governance) and sustainability efforts. She outlined primary risks linked to poor animal welfare practices and how financial institutions can promote higher welfare standards.
Groberski highlighted the organization’s focus on addressing the most severe issues affecting the largest number of animals, such as cages for egg-laying hens and crates for gestating sows. “These production systems were created many years ago to simplify production processes, with absolutely zero regard for animal welfare. These practices align with a lot of sustainable intensification strategies to produce ‘more with less.’ Cages and crates prevent animals from expressing nearly all natural behaviors—they can’t turn around or lie down comfortably,” Groberski said.
She emphasized that animal welfare best aligns within the “Social” pillar of ESG and cautioned that supporting poor welfare systems perpetuates unsustainable practices, “Animal welfare fits in with sustainability efforts, including efforts in emerging regions. It doesn’t make sense to encourage and finance poor welfare systems that have been deemed cruel and are being phased out of other economies... that would just be supporting practices proven to be unsustainable over the long term.”
Groberski pointed to the growing inclusion of animal welfare in global standards such as the OECD Guidelines for Multinational Enterprises and frameworks like the sector standards from the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
HSI’s call to action was clear: financial institutions must create detailed public-facing policies on animal welfare. Groberski argued that vague references to concepts like the Five Freedoms are insufficient and that policies should explicitly state what institutions will or will not support, such as refusing to finance operations that haven’t committed to transitioning away from gestation crates.
As an example of progress, Groberski highlighted Agrobank in Malaysia, which is providing advantageous financing for the country’s first cage-free aviary.
IFC’s presentation: “Animal welfare through the eyes of the investor”
Ivan Ivanov, Global Lead for Sustainable Protein Advisory at IFC, introduced IFC’s approach to addressing farm animal welfare within its $4.1 billion agribusiness portfolio. He explained how animal welfare is integrated into IFC’s Performance Standards as well as IFC Practices for Sustainable Investment in Private Sector Livestock Operations, a policy released in 2022 that includes requirements for responsible antimicrobial use and animal welfare, among other things.
“Companies that we finance must have a good husbandry system, and that includes animal welfare because it is important at every stage of an animal’s life,” Ivanov stated. He also mentioned IFC’s exclusion list, “we outline certain practices that we do not accept, like production of fur, force feeding, and also caged animals specifically for layer production and pregnant sows.”
Ivanov noted that, in compliance with IFC Performance Standards and Practices, IFC requires clients to transition from gestation crates to group housing systems, which provide sows with greater freedom of movement. However, he acknowledged that such transitions could present challenges, making managerial buy-in, training, and support from financial institutions essential. He emphasized that any new system must be practically feasible and free from adverse effects on the production system or the producer; otherwise, IFC would not mandate the transition.
Two IFC case studies demonstrated the benefits of group housing systems. A Ukrainian producer that transitioned to group housing reported no change in costs, healthier sows, and access to international financing. Similarly, a Chinese producer experienced shorter labor times and a 0.8% reduction in stillbirth rates. This information aligns with results of HSI’s Business case on pre-implantation group housing.
Ivanov acknowledged that most countries lack robust animal welfare regulations. For example, IFC’s regulatory scan of Vietnam revealed that only two of the World Organization for Animal Health (WOAH) guidelines are addressed in the country’s legislation. He stressed that Vietnam is not unique, as most governments worldwide fail to adequately regulate animal welfare.
IFC collaborates with governments to strengthen regulatory frameworks and align them with international standards. Ivanov invited financial institutions interested in engaging with the Vietnamese government on these issues to join IFC’s efforts.
Conclusion: Collaboration for change
Both HSI and IFC stressed the importance of collaboration to improve farm animal welfare standards. While the two organizations do not align on every issue—HSI advocates for stricter policies than those currently enforced by IFC—they agree that financial institutions have a pivotal role in reducing farm animal suffering.
“We don’t align on everything, but we do agree that billions of animals are suffering in global food systems, and we do agree that financial institutions play a pivotal role in reducing this suffering,” said Groberski. “Having these conversations and working together to determine challenges, solutions and opportunities is essential.”
Ivanov echoed this sentiment, emphasizing that addressing animal welfare is not just a moral responsibility but also a strategic and financial necessity.
The webinar concluded with a call for financial institutions to implement meaningful public-facing policies that align with global standards and take actionable steps toward improving farm animal welfare.
If you work at a financial institution that wants to take the next step in improving its policies by meaningfully addressing animal welfare, please reach out to Jackie Groberski, CFA, with Humane Society International. The first step is a simple conversation to determine how HSI can help. HSI's support is free.
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Contact Jackie Groberski, CFA - jgroberski@hsi.org with questions, comments or concerns.
RESOURCES
PDF of PowerPoint slides and edited transcript [ENGLISH]
PDFs of PowerPoints [ENGLISH]