Case Study

International Finance Corporation: Good animal welfare is good business

The International Finance Corporation (IFC), a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries. It provides loans and financing to support growing private businesses throughout the developing world and its mission is to create opportunity where it’s needed most, delivering lasting solutions for development. IFC currently has more US$91bn of assets under management.

Sustainability is critical to positive development outcomes

The IFC believes that environmental and social sustainability is essential for achieving positive development outcomes and managing risks.

All IFC projects and investments are assessed against its Sustainability Policy and Environmental and Social Performance Standards, widely regarded as a global benchmark for environmental and social risk management in the private sector. The IFC Performance Standards provide a framework for measuring and improving environmental and social performance, and all investments are required to have Environmental and Social Action Plans, which are agreed during due diligence as a condition of financing and encourage performance improvement over time.

IFC invests only in companies that demonstrate commitment to compliance with its Environmental and Social Performance Standards. Clients who are engaged in primary agricultural production, including animal husbandry, are advised to manage those operations in a sustainable manner through the application of industry specific good practice.

An emerging and important issue

IFC sees animal welfare as an emerging and important issue, for businesses around the globe and the organisation has produced a Good Practice Note – Improving Animal Welfare
in Livestock Operations to guide how issues of animal welfare are managed. The good practice note sets out the business case for strong animal welfare and the welfare standards businesses should work to achieve.

Good welfare is good for business

IFC argues that animal welfare presents both risks and opportunities for companies, and that good animal welfare is good for business. Reduced exposure to stress and disease for
animals increases productivity. Consumers also want to know that animals are treated humanely. Demonstrating best practices in animal welfare can improve market access – an issue which is often crucial for the growth of emerging market businesses.

Head Industry Specialist for the IFC’s agribusiness sector, John Hatton explains: “Over the last decade or so animal welfare has become increasingly important for livestock operations. Regulatory oversight is expanding across the food supply chain, and consumer tastes are changing to demand both better welfare and food safety standards. Those emerging market producers who meet and exceed standards can gain access to new markets for animal-welfare-accredited products.”

Improved productivity

The IFC’s good practice note highlights growing evidence to show that improvements to animal welfare can also lead to improved productivity, with potentially positive impacts
on the bottom-line.

For example, research indicates that improved stock handling practices can save the industry millions every year by improving the quality of processed meat. Other research has shown
that improving the attitudes and behaviours of people handling dairy cows can lead to a four to five percent increase in milk production on dairy farms. Aggressive or poor handling of pigs for just a few minutes a week can reduce growth by 11% and reduce pregnancy rates by as much as 62%.

Animal health

“Emerging diseases such as avianflu and swine flu can threaten entire facilities and lead to the destruction of huge numbers of animals, and present significant risks to humans.” – John Hatton, Head Industry Specialist for the IFC’s agribusiness sector.

The IFC good practice note highlights how poor animal health can negatively impact businesses, citing research from the World Organisation for Animal Health (OIE) which estimates that animal diseases cause the loss of at least 20% of global livestock production each year with a cost of approximately US$300bn. The risks of disease and biosecurity extend beyond the industry to wider society, said Hatton.‘Emerging diseases such as avian flu and swine flu can threaten entire facilities and lead to the destruction of huge numbers of animals, and
present significant risks to humans.’

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