Case Study

Rathbone Greenbank: Knowledge of this issue is growing

The team at Rathbone Greenbank Investments has been at the forefront of ethical and responsible investment since 1992. Working with both retail and institutional clients it manages over £1.2 billion in assets and launched one of the UK’s first tailored ethical portfolio services.

Knowledge of this issue is growing

The team at Rathbone Greenbank Investments has been at the forefront of ethical and responsible investment since 1992. Working with both retail and institutional clients it manages
over £1.2 billion in assets and launched one of the UK’s first tailored ethical portfolio services.

The investments within Rathbone Greenbank client portfolios are managed according to a broad range of social, environmental and ethical criteria, with the specific exclusions and positive selection areas set according to each client’s concerns and interests. Its approach is to ask each client to complete an ethical questionnaire to help determine how their money should be invested; and if animal welfare is established as an important issue then Rathbone Greenbank will offer the client several options. These include negative screens to avoid the worst performing companies and positive investments supporting best in class performance.

Kate Elliot, Ethical Researcher at Rathbone Greenbank, explains that although there have always been ethical concerns related to poor animal welfare, in recent years the topic has
emerged as a material investment issue as well. She says, “Over the last few years farm animal welfare has evolved into an investment issue in its own right, with a number of associated risks in areas such as the environment, human health, regulation and reputation. Also the ability of a company to manage farm animal welfare issues has become a good proxy for how well that company has oversight of risk across their entire supply chain.”

There is such a thing as bad publicity

Rathbone Greenbank also argues that good management of animal welfare issues is integral to the reputation of many leading brands, and ultimately to projecting value. Elliot points to the example of Tesco, which suffered a 13% drop in share price when TV documentary ‘Hugh’s Chicken Run’ exposed the poor conditions Tesco’s broiler chickens were subjected to.

In the wake of this documentary Rathbone Greenbank assisted in filing a resolution at Tesco’s 2008 AGM calling for higher welfare standards – which helped persuade Tesco to join an industry wide forum on the issue. Rathbone Greenbank also joined the ‘Chicken Out!’ campaign led by celebrity chef Hugh Fearnley-Whittingstall to improve welfare standards for broiler chickens across the UK retail market. The ‘Chicken Out!’ campaign helped sales of higher welfare chicken in the UK grow from 5% to 15% and won  a pledge from a major supermarket to remove battery farmed eggs from its supply chain.

A knowledge gap exists

“The ‘Chicken Out!’ campaign helped sales of higher welfare chicken in the UK grow from 5% to 15%” – Kate Elliot, Ethical Researcher at Rathbone Greenbank

Elliot argues that too little information exists to help investors judge standards of farm animal welfare management at most companies and within supply chains. That is one
of the reasons that Rathbone Greenbank agreed to be part of the investor steering group consulted on the development of the Business Benchmark on Farm Animal Welfare (BBFAW).

The BBFAW ranks how the world’s leading food companies are managing and reporting their farm animal welfare practices and Rathbone Greenbank uses it to understand how well
particular companies are responding to issues of farm animal welfare within their operations and supply chains.

“Companies are increasingly aware that progress on animal welfare issues can create value”– Kate Elliot, Ethical Researcher at Rathbone Greenbank

Elliot says that they often make investee companies aware that BBFAW ratings are used as part of their assessment for establishing the suitability of a company as an ethical investment. “We also use BBFAW ratings as a starting point for both informal and formal discussions with companies to apply pressure on that company to improve performance,” she says.

Ms Elliot concludes, “Knowledge of this issue is growing, and companies are increasingly aware that progress on animal welfare issues can create value”.

More information:
https://www.rathbonegreenbank.com/