This year, fast food chains Jack in the Box and Wingstop agreed to publish their first set of measurable climate targets, following a campaign by the shareholder advocacy group The Accountability Board.

The two-year-old non-profit owns shares in roughly 100 publicly traded companies. Its purpose: “to hold companies accountable on issues relating to the environment, social matters and corporate governance,” says co-founder Matt Prescott.

A growing movement of non-profit shareholders are filing proposals and seeking action to increase corporate accountability. “They’re using the financial-system infrastructure to enable them to get access to companies that they might not get access to otherwise,” explains Kevin Chuah, an assistant professor at Northeastern University who researches stakeholder activism.

The Accountability Board focuses on food and agriculture companies like Tyson Foods and Hormel Foods because they have an outsized impact on the environment and animal welfare, Prescott says.

While many multinational corporations have made public climate commitments, they have often failed to back them up with actionable plans for accomplishing those goals. That was the case with Jack in the Box, according to Prescott. “They’ve got disclosures about risks posed by climate change and other environmental issues, but the company didn’t actually have measurable goals for reducing its emissions,” he says. Thanks to the newly passed proposal, now they will.

Jack in the Box now reports Scope 1 and 2 emissions – that is, emissions the company directly emits or that are generated from the electricity or other utilities the chain uses. In the food sector, however, as much as 90% of greenhouse gases come from Scope 3 sources, with most of those coming from meat and dairy products. Scope 3 refers to emissions that come from a company’s supply chain, which in this case includes the beef burgers that are a massive driver of food-related emissions.

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The Accountability Board structures its proposals strategically to make them more likely to succeed, such as by keeping them general, Prescott explains. For example, the group may ask for measurable targets without prescribing what those targets should be. Otherwise, major shareholders – who tend to shy away from proposals that are overly prescriptive – might withhold their support, Prescott says.

The evolution of shareholder activism

Shareholder activism traces its roots to the 1980s. At the time, shareholder activists usually sold their shares once their goals were achieved, earning them the nickname of “corporate raiders.” Since then, activist investors have managed to reform their reputation and corporate executives now take a greater interest in shareholder perspectives.

The Accountability Board doesn’t usually sell its shares, instead choosing to maintain and also grow its portfolio, Prescott says. Most of the shares the organization owns were bought with an initial $11-million grant from the non-profit foundation Open Philanthropy.

For Chuah, shareholder activists are one piece of the bigger picture of change. Agitator non-profits and religious groups are often the ones “who get issues onto the table and effectively bring them to the attention of the mainstream,” he says. Next, “the institutional investors get on board.” Real progress, according to Chuah, requires both: those working within and outside of institutions.

Grace Hussain covers farming and agricultural policy. She holds her MS in Animals and Public Policy from Tufts University.

This article was originally published by Sentient. It has been edited to conform with Corporate Knights style.

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The Together for Sustainable Packaging alliance – which includes McDonald’s, Dunkin’ Donuts, and Baskin Robbins – is pushing back against reuse regulations with marketing campaigns that suggest that the sweet simplicity of takeaway as we know it is at risk. Observers have been struck by the sheer scale of the lobbying effort on display in the European Parliament.  

Last November, the European Commission proposed new EU-wide rules to reduce packaging waste by 15% by 2040, compared to 2018 levels. If approved, revised legislation would ban single-use packaging for food and beverages consumed inside restaurants and cafés, single-use packaging for fruits and vegetables, and those mini shampoo bottles we take home from hotels. Other measures aim to make packaging entirely recyclable by 2030 and set mandatory minimums of recycled contents in new packaging. The proposed legislation also demands rigour when it comes to material labelled as biodegradable, requiring companies to specify how long the material will take to decompose, under which circumstances and in which environment.  

According to the European Commission, each person living in Europe produces, on average, roughly 180 kilograms of package waste per year. Without stricter action, legislators say, the region is on track to see its packaging waste jump another 19% by 2030. In the case of plastic alone, it could soar by 46%. Proponents say the new rules will slash water usage and greenhouse gas emissions by an amount equivalent to what Croatia generates every year.  

Environmental advocacy organizations have applauded the “strong aim” but pushed legislators to be “more ambitious.” They also warn against ploys to water down language.  

The current system works really well for them, because they get to keep using single-use packaging.

 

– Justine Maillot, Rethink Plastic alliance

 

Enter exhibit A: a multi-pronged campaign by the fast-food lobbying group calling out what a study it funded said would be a skyrocketing need for water and energy to wash reusable containers, along with a greater risk of cross-contamination in food-production lines. In March, McDonald’s, which generates more than one billion kilos of packaging every year, sponsored an article on the news website politico.eu that argued that reusable packaging will be “counterproductive” to the Green Deal goals Europe is trying to achieve. It’s not alone: industry lobbyists had more than 290 meetings on the topic with European Parliament members in early 2022 alone, according to DeSmog. 

None of this is a surprise to environmental advocates. “The current system works really well for them, because they get to keep using single-use packaging,” Justine Maillot, from the advocacy organization Rethink Plastic alliance, told DeSmog. “It’s still very profitable.” 

Efforts to combat packaging waste have been a long time coming. Zimbabwe banned plastic bottles and packaging back in 2010. The small Caribbean nation of Antigua and Barbuda followed suit with single-use takeaway items in 2016. Parts of Europe have more recently entered the fray, with France now making it mandatory for fast-food restaurants to use reusable dishware and cutlery, and similar regulations will take effect in Britain later this year. In 2022, Canada announced its own phased-in prohibition on the manufacture, import and sale of six single-use plastic items, including plastic bags, straws and cutlery.  

Researchers at the University of Portsmouth note that it will take more than bans to change throwaway-culture attitudes. Governments need to actively pursue truly greener alternatives – a paper bag may not cut it, they note. Antigua and Barbuda, for example, invested in research for plastic alternatives and approved bagasse, a fibrous residue left from sugarcane processing, as a substitute material for packaging. In Vanuatu, bags and food containers made from palm leaves filled a gap after plastic bags were banned. “Working closely with the public like this can also encourage innovation,” the researchers noted.  

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RCC – which represents more than 45,000 storefront retail businesses, including major grocery chains Loblaws, Walmart and Sobeys – had in 2013 pledged to phase out gestation crates for pregnant pigs by 2022, and in 2016 declared it would source only cage-free eggs by 2025. In the recent announcement, RCC stated it was “renewing [its] focus on animal welfare” and planned to “pursue and make commitments solely through NFACC [the National Farm Animal Care Council] thus removing previous commitments on sow housing and cage-free eggs.” Meaning, RCC grocery members will no longer be endeavouring to source only cage-free eggs and crate-free pork in the near future.

According to the Loblaws website, since the commitment was made the company has “worked with our suppliers to achieve these targets. Unfortunately, it has become clear that our farmer partners are unable to meet these timelines.”

Kaitlyn Mitchell, an animal rights lawyer with Canadian organization Animal Justice, says “RCC’s decision to backtrack on its commitments will make a bad situation even worse for farmed animals in Canada.”

“Farmed animals in Canada are subjected to cruel practices that would not be allowed in many other jurisdictions, including confining pregnant pigs in tiny gestation crates and keeping egg laying hens in crowded battery cages.” Battery cages are banned in the EU, New Zealand and several U.S. states. However, Humane Canada reports that approximately 90% of egg-laying hens are currently held in battery cages in Canada. Gestation crates, which keep pregnant sows in cages so small they’re unable to turn around, have also been banned in several U.S. states, as well as in the U.K. and Sweden. NFACC recently announced a delay in its commitment to phase out gestation crates, slated for 2024, now pushed to 2029.

Polling shows Canadians are increasingly concerned about the welfare of animals raised for meat, eggs and dairy, with many consumers willing to pay more for products if it means reducing animal suffering. A 2013 survey conducted by Humane Society International Canada found that 82% of respondents wanted to see clearer labels on meat, dairy and egg products that indicate how animals are treated. A 2020 public trust survey conducted by the Canadian Centre for Food Integrity found that 39% of respondents identified humane treatment of farmed animals as an issue of “extreme” concern.

This concern is also evident in the market, with consumer demand for cage-free eggs increasing in recent years and a growing number of food companies making public promises to fully phase out cage confinement of egg-laying hens in their supply chains. Tim Hortons and Burger King, for example, have both committed to going cage-free in North America by 2025, and in the EU, McDonald’s has already reportedly gone 100% cage-free. Though A&W Canada stated in 2016 it planned to source only cage-free eggs by 2018, there is no mention of housing at all on the current “Eggs” section of A&W’s website.

Pig gestation crates have also come under mounting public scrutiny, leading to the world’s largest pork producer, American company Smithfield Foods, declaring in 2007 that it would phase out the practice. Nearly 15 years later, however, the company has yet to fulfill that commitment.

In a statement to Corporate Knights, Loblaws says it is proud of the progress the company has made regarding animal welfare, “including converting all President’s Choice shell eggs to cage-free and converting approximately 30% of fresh PC Free From pork to group housing for gestating sows,” but is also disappointed that previously made cage-free goals will not be reached “by the original target dates.”

Empty animal-welfare promises are not a good look for the food industry, says Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University. “I don’t think the [RCC announcement] will support the industry well,” he says. “It will position the industry as not delivering on a promise” and could lead to consumers being skeptical of such commitments in the future. He adds that one Ontario hog producer informed him that not all hog farmers were on board with the crate-free commitment in the first place. But, he adds, “more and more people believe that we need to raise and produce food responsibly. That’s a fact and we need to respect that.”

Pigs and chickens are “intelligent, curious, social creatures … often forced to spend their entire lives in caged housing where they cannot even turn around,” said World Animal Protection in a statement. Colin Saravanamuttoo, executive director of the organization, added that RCC’s past commitment to phase out these concerning farming practices “signalled meaningful progress to how animals are raised in Canada, and reflect consumer expectations for humane farm animal treatment.” He said retailers should be leading the way and “pushing for positive change within the industry.”

The RCC said that since 2014, “the proportion of sows housed in group housing has more than tripled,” and since 2017, “the proportion of hens housed in alternative methods of egg production has more than doubled.” However, confining hens and pigs in small cages is permitted under the NFACC codes that RCC members will be focusing on going forward. NFACC codes are not laws, but rather voluntary codes of practice created and overseen by a variety of mainly industry stakeholders, including the Canadian Pork Council, Canadian Hatching Egg Producers, the Canadian Poultry and Egg Processors Council, and Restaurants Canada.

World Animal Protection and Humane Canada also have seats at the NFACC table; both have publicly called for RCC to reinstate its cage-free commitments.

NFACC codes also permit practices such as chick debeaking, culling live male chicks (a by-product of the egg industry) via macerator, euthanizing piglets by slamming their skulls into the ground, and the use of electric prods.

“Our current voluntary system is broken and is failing farmed animals as well as the Canadian public,” says Mitchell, who believes Canada needs “strong, proactively enforced laws to promote transparency and accountability.” She says RCC’s decision to backpedal on its cage and crate-free commitments “shows why we cannot rely on industries and consumer organizations to voluntarily take steps to protect farmed animals.”

RCC did not respond to requests for comment.

Jessica Scott-Reid is a freelance writer and animal advocate. She writes for major media across Canada and the U.S. She is also a co-host of Canada’s animal law podcast, Paw & Order, produced by Animal Justice.

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