News

UK report criticising AA Co’s environmental governance sends industry warning

Jon Condon, 28/06/2018

A SUSPECT report by a UK-based agency criticising a large Australian pastoral company for its ‘poor disclosure and management of environmental issues’ has raised questions about how well the red meat industry projects its environmental and sustainability credentials to the broader community.

UK investor network Farm Animal Investment Risk & Return last month issued a ranking of top global food producers based on ‘investment risk’ factors, including greenhouse gas emissions, water scarcity, animal welfare and antibiotic use.

The report, based only on publicly-listed entities, suggested that two Australian companies, AA Co and chicken producer, Inghams, posed “some of the highest risks” based on their “lack of evidence and disclosure of management of environmental, social and human health issues.”

The judgement appears to be based more on lack of communication than lack of management, and to be fair, other large Australian (non-listed) pastoral entities would probably have received similar scores, if assessed the same way.

AA Co would in fact argue that it is closer to best practise in terms of extensive cattle industry carbon emissions footprint, due to genetic selection, use of lotfeeding to condense animal life cycles, nutritional support and a host of other management inputs.

While FAIRR appears to carry no great weight as an authority in international investment circles, its report was used by The Australian newspaper this week in an article as evidence that beef production could become the target of a “growing global campaign that threatens to make ‘cows’ the next ‘coal’ in climate change action.”

Questions have arisen over the methodology behind the FAIRR group’s environmental performance assessment, with judgements apparently based on little more than looking at various company websites. But as suspect as the agency’s environmental scrutiny appears to be, the episode raises questions about how well the Australian beef industry, and large individuals within it, present their environmental and sustainability credentials and progress to the broader community.

AA Co’s own website currently carries only fairly superficial references to environmental management – an issue that the company had already begun to address, prior to the release of the report.

Similarly AA Co’s 2018 annual report released recently contains no references at all to environmental management in chairman, Don McGauchie’s message to shareholders, while chief executive Hugh Killen’s remarks were somewhat general in nature, suggesting that the company “understood that people care about how the foods they eat are grown and produced.”

“That’s why environmentally and socially sustainable practices are such a crucial part of our ability to deliver the highest-quality beef to the world. This commitment to sustainability is at the core of our values, and will ensure we continue to protect the resources on which our production relies,” Mr Killen said.

“We take the custodianship of the land very seriously and are committed to innovative environmental management.”

Well prior to the FAIRR report AA Co had already signalled its intention to present its environmental and social governance credentials in a more proactive way. As the nation’s only publicly listed beef entity, AA Co is acutely aware that it often attracts higher community expectations and requirements than others in the industry.

Staff appointments including an environmental and social governance specialist, and corporate affairs manager were made earlier this year. To help formalise its sustainability efforts, the company has signalled an intention to produce more and better communication around the issues in the coming year. Detailed annual sustainability reports may be part of that process.

In a statement provided to Beef Central, an AA Co spokesperson said the company understood that people cared about how the foods they eat are grown and produced.

“That’s why environmentally and socially sustainable practices are a fundamental part of the company’s ability to deliver branded beef to the world’s most discerning consumers. This commitment to sustainability is at the core of our values, and will ensure we continue to protect the resources on which our production systems are based.”

“AA Co is committed to working to reduce energy and greenhouse gas emissions. To do this, we recognise the importance of better understanding agricultural GHG flows at pasture and production level, so that we can quantify emissions from our operations and improve our effective management of them,” the spokesperson said.

“This is a key focus at present, and while AA Co’s pastoral and production practices are at the cutting-edge of best practice in terms of genetics, pasture management and feed supplementation, better data and industry benchmarking will help us drive further, long-term improvement.

“In terms of specific initiatives to reduce our carbon emissions, we undertake carbon abatement through improved feed supplement and selecting animals based on their feed efficiency. We are also partnering with other peak bodies and institutions who leading research into innovation and new technologies to further improve carbon abatement outcomes. We have also invested in solar power on stations and are investigating accelerating that program of work.”

Broader need to engage over environmental performance

Consolidated Pastoral Co chief executive Troy Setter said there was a need for all Australian beef entities to be more proactive and public about their environmental and sustainability progress.

“It’s more than just big pastoral companies – it’s everyone,” he said.

“It’s important for all stakeholders to continue to do the right thing, and if there are areas where we can make improvements, let’s identify them, and focus the appropriate time, energy and resources on improvement.”

“But pastoral companies and others in the cattle business have perhaps not done the best job of telegraphing those actions to the broader community. There’s plenty of examples of best management practise across the industry, and I do feel we could all do a better job of sharing those successes, and progress with the broader community,” Mr Setter said.

“There is a good story to tell, and the work that the Red Meat Advisory Council is doing with the Australian Beef Sustainability Framework is giving us a scorecard and some key performance indicators to assess ourselves against, and that allows is to then benchmark against those key metrics. The Framework will be a key to the way the industry can take more control over the sustainability discussion,” Mr Setter said.

“As an industry, we don’t do that self-promotion well, but it’s important that we start, to impress on the broader community how seriously we do take our environmental responsibilities.”

 

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Comments

  1. Mark Minnis, 29/06/2018

    Really when are we going to start standing up to these politically-correct do-gooders just leave us alone and let them do what they know they are doing. Time for Australia to get up and take back what is ours, and tell the rest to disappear with there crap.

  2. Rob Zee, 29/06/2018

    Great!! Now we have to contend with a bunch of Poms, ignorant about Australia, telling us how to farm, report and how our systems of governance should work!! This is what happens when Australia starts trying to dictate terms to other countries. It comes back to bite us!

  3. Paul Franks, 29/06/2018

    If you look up the founder of Farm Animal Investment Risk & Return Jeremy Coller, it makes you go hmmm if an agenda is being pushed or not.

    https://en.wikipedia.org/wiki/Jeremy_Coller

    The Jeremy Coller Foundation is a strategic grant-making organisation, focused on two primary programme areas: ending factory farming and improving venture and management education.

  4. Paul D. Butler, 28/06/2018

    Be careful about working with wackos that have an agenda to destroy animal agriculture…………….do your best to explain more directly to consumers………NOT to self appointed overlords of “smart”.

  5. Greg Campbell, 28/06/2018

    The FAIRR report does highlight some of the challenges in front of the industry but as the commentary above notes, significant progress is already being made to present the facts on many of these issues. It’s also important to be aware of the many hidden agendas which run behind the challenges to our cattle and beef industry. The creator of this FAIRR index for example, is a Mr Jeremy Coller, whose Wikipedia profile states that his organisation, the Jeremy Coller Foundation, has two aims. One is “ending factory farming”.

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