RI Europe 2015: Jeremy Coller backed FAIRR initiative to report on animal welfare investment risks

Private equity chief sees “four inconvenient truths” in factory farming.

Jeremy Coller, Founder and Executive Chairman of UK private equity secondaries firm, Coller Capital, says his new initiative to have the risks associated with farm animal welfare considered as a material ESG (environmental, social and governance) investment issue, will publish its first report on those risks next month.

Coller announced the initiative, FAIRR (Farm Animal Investment Risk & Return), in February and soft launched it at the RI Europe 2015 conference. In a keynote interview with RI Managing Editor, Hugh Wheelan, he said he envisioned FAIRR as a network of investors who agree to consider animal welfare as an investment/risk issue and will monitor investee companies on how they deal with it. Most of the initiative’s focus is on animal factory farming (AFF).

Coller said he hoped animal welfare would be seen as one of the priorities for investors who have embraced the United Nations-supported Principles for Responsible Investment (PRI).

“It’s not on the PRI list and we’d like to change that. And I ask all of you investors in the room to join us,” Coller told delegates. To illustrate the investment risks associated with poor treatment of animals, Coller cited the documentary film “Blackfish,” which portrayed the lot of killer whales captured by Sea World, the US amusement park operator.“When the film came out last year and went viral, there was a 30% decline in attendance. Its (Sea World’s) share price also declined 30%. Its CEO was also fired last month.”

He continued: “Coming to animal factory farming, there is the case of Hallmark-Westland, a California meat-packing company. It had the biggest product recall in US history: 143 million pounds of beef were recalled, or the equivalent of 200 jumbo jets.
The recall cost the company $116m. But what bankrupted them in 2012 was a class-action suit that followed.”

Hallmark-Westland, said Coller, was an example of a short-term risk. With respect to the long term, he said there were “four inconvenient truths” about factory farming. One was the spread of drug resistance due to overuse of antibiotics on farm animals. The second was that it contributed greatly to global warming due methane release. The third was undernourishment caused by the need to support the practice with crops. And the fourth was ignorance about the issue.

“FAIRR should not necessarily be seen as a divestment campaign. Instead, what we’re asking is that investors plug the knowledge gap,” Coller said.