The Foundation of the founder of secondaries firm Coller Capital will this year publish a major materiality report on animal welfare and investment.
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Jeremy Coller is one of the biggest names in private equity. As founder, Chief Investment Officer and Executive Chairman of London-based Coller Capital, the firm he founded in 1990, his name is synonymous with the secondaries buyout market that the firm was key in developing.
Fewer people will know him as a committed vegan and campaigner against animal factory farming (AFF).
And fewer still as a champion of ESG.
That is about to change.
With the roll out this year of the Farm Animal Investment Risk & Return (FAIRR) campaign, Coller aims to put animal welfare on the ESG agenda, and front and centre of the United Nations-supported Principles for Responsible Investment (PRI).
ESG, he says, has become: “One of the most powerful tools in the world for change alongside legislation and social media.” Says Coller: “It’s a big statement, I know. But meaningful legislation is so difficult to enact these days, whereas capital flows were part of the major changes to apartheid in South Africa. I think if we can get action on AFF as a core value within UNPRI, or higher up on the agenda, it could change this issue profoundly.”
FAIRR is part of the animal welfare programme campaign of the Jeremy Coller Foundation, his philanthropic fund.
Its rationale is that there are significant material impacts that farm animal welfare issues can have on investor portfolios. As an example, it cites a 13% plunge in the share price of UK supermarket Tesco after a TV show revealed it stocked intensively reared chickens. By comparison, it says the revenues of US restaurant chain Chipotle rose over 23% following a campaign highlighting its use of higher-welfare meat. It says the evidence
suggests animal welfare issues present “an iceberg of risks” to investors. Its campaign says: “Above the surface, scandals such as swine flu, avian flu and horsemeat have shown how poor animal welfare and industrial production methods can lead to value destruction. But more than this we believe that under the surface there are a wide-range of risks, all linking back to poor animal welfare standards, which could damage long-term performance for investors.”
On the day RI speaks with Coller, UK newspaper front pages are dominated by a Food Standards Agency report finding that eight out of 10 fresh chickens bought from UK supermarkets during the summer of 2014 were contaminated with Campylobacter, the potentially lethal food-poisoning bug. One of last year’s hit books was Farmageddon: The True Cost of Cheap Meat, an exposé of the food industry by Philip Lymbery, Chief Executive of Compassion in World Farming (CIWF). An investigative article earlier this month in the New Yorker on chicken production and Salmonella in the US revealed that responsibility for food safety is divided among fifteen federal agencies with a different agency monitoring frozen cheese pizza than that which monitors frozen pepperoni pizza.
It’s an issue whose time in the public eye has come.
But why the ESG epiphany for Coller?
He acknowledges that he personally paid “lip service” previously.
At the same time, he points out that Coller Capital has had an ESG committee since 2011, comprising five senior managers within, notably Susan Flynn, Investment Partner. They produced a firm-wide ESG policy in 2012, and take ESG very seriously, he says, as do many of its Limited Partner (LP) clients.
And underpinning his own business perspective, he says,
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