Don't Treat Your Animals Right? Don't Expect Investors To Pour Money Into Your Company

When it comes to investment in large food companies, where do asset managers look for indicators of a good business model? You may think in terms of profits and losses, but here's another part of the equation for investment opportunities: animal welfare. According to FTfm, potential investors are scoping out whether chickens, cows, and pigs are raised and slaughtered humanely. Why? According to investment experts, having a strong sense of animal welfare is the mark of a good business model.

"Investors are saying it gives them a way to differentiate [between] leaders and laggards, to see how good companies are at identifying risks in their supply chain," Rory Sullivan, an independent consultant and co-author of a report on animal welfare in business supply chains, told FTfm in an interview.

Sullivan and other investment experts explained that a company that does not take animal welfare into consideration when putting out a prop duct is a company that also takes "unnecessary reputational risks." A major pizza cheese supplier, for instance, came under fire this year for animal rights violations. On the opposite end of the spectrum, part of Chipotle and Starbucks' financial success could be attributed to both companies' dedication to animal welfare. Chipotle famously dropped a pork supplier after the treatment of their pigs was not up to Chipotle's standards, leading to the Great Carnitas Shortage of 2015.