Background. The Co-operative Dairy Group was created in August 2011 to provide a dedicated supply chain for milk

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1 Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people Animal welfare 251m sales of products from animals reared to higher welfare standards in 2011 (2010: 204m) 100% own-brand shell eggs, milk, fresh and poultry, beef and pig meat sourced from UK Animal welfare standards Indicator: Standards and assurance of food production Targets 2011 Progress Target 2012 E.P. Improve animal welfare standards for dairy cows together with environmental impacts by developing a dedicated supply chain for milk Ensure primary own-brand suppliers install CCTV in abattoirs during 2011 In the UK, basic animal welfare 5 is assured via farm assurance standards, sometimes signified by a Red Tractor Mark or Quality Standard Mark 6. Our own Elmwood standard and the RSPCA Freedom Foods standards stipulate higher welfare requirements such as higher minimum Background Every year in the UK, around 850 million chickens 1 and 9.8 million pigs 2 are reared for meat and around 34 million hens are kept for egg production 3. To meet this level of production, most modern farms operate intensive systems. Consumers are increasingly demanding products that guarantee higher standards of animal welfare and public policy developments are also raising standards. On 1 January 2012, an EU ban on conventional battery cages came into effect. The testing of cosmetic products or ingredients on animals ended in the UK in 1998 but the sale of animal-tested products in the UK will not be fully phased out until In 2009, the Seventh Amendment of the EU Cosmetics Directive banned animal testing of cosmetic products and their ingredients, and the sale and import of virtually all cosmetics tested on animals. The Co-operative Dairy Group was created in August 2011 to provide a dedicated supply chain for milk CCTV was installed at own-brand supplier abattoirs in 2011 space requirements, more environmental enrichment and more natural daylight, which allows animals to exhibit more normal behaviours. Alongside these standards, we have developed additional requirements that Materiality and strategy As a major food retailer, we have a significant impact on animal welfare standards through the products we sell. Animal welfare was identified as a priority in our Food Ethical Policy consultation (page 10), in which over 100,000 co-operative members took part, and is a priority in our Ethical Plan (page 7). Animal testing, the fur trade, intensive farming and blood sports were identified as priorities in our latest Bank Ethical Policy consultation (page 10), in which over 80,000 bank customers took part. Our strategy is to improve baseline production standards for the most intensively farmed animals pigs and poultry through the development of our own-brand Elmwood higher welfare range and sales of RSPCA welfare standard Freedom Foods. Around 800 own-brand fresh and, meat and poultry lines 4 are sold in The Co-operative Food stores. For the first time this year, higher welfare standards in prepared product ranges are reported online. E.P. Improve the animal welfare standards for dairy cows, together with environmental impacts, by developing a dedicated supply chain for milk, which will benefit contracted farmers with green electricity and energy efficiency surveys from 2012 apply to all own-brand products. Livestock can only be transported for a maximum of six hours thought to be among the lowest transportation time allowed by the major national food retailers and all livestock reared for our own-brand products must be pre-stunned prior to slaughter 7. 1 The Co-operative Group Sustainability Report 2011

2 CCTV During 2011, own-brand primary product suppliers introduced CCTV in live animal handling and processing areas of abattoirs to improve our ability to monitor standards. Some suppliers still need to update or install new systems. During 2011, The Co-operative Food participated in the development of a new Food Standards Agency code of practice for the control and operation of CCTV in abattoirs. Performance recognition Assurance Independent third-party auditors check compliance with national standards and with our own Elmwood standard 8. In 2011, our technical team undertook a further 163 meat and poultry inspections at suppliers sites to look at product quality, safety and legality and animal welfare matters (2010: 158). We visited another 62 sites such as farms, hatcheries and In 2011, our performance was recognised with a number of prestigious awards: RSPCA s Most Improved Supermarket Award Compassion in World Farming s Most Improved Supermarket Award abattoirs to look specifically at livestock production and welfare issues (2010: 33). We extended our online database, that records animal welfare indicators for Elmwood chicken supplier farms, to include Elmwood turkey and pig supplier farms and dairy group farms. Our Food Technical Team worked with suppliers to monitor standard farm assurance indicators. Our higher welfare standards are explained in more detail online. Product range and sales Indicator: Range and sales value of products from animals reared to higher welfare standards Targets 2011 Progress Targets 2012 E.P. Continue to ensure that shoppers operating on a variety of budgets have the opportunity to support higher baseline animal welfare standards, and that all shell eggs and egg ingredients in own-brand products are at least free-range E.P. Extend our higher baseline standards, Elmwood, from chicken and turkey to pork in 2011 In 2011, sales of products from animals reared to higher welfare standards totalled 251m (2010: 204m), with 321 lines available in Food stores (2010: 235) 9. Sales continue to grow, driven in the case of Elmwood products, by the introduction of Elmwood pork standards. RSPCA Welfare Freedom Food, free-range, organic production and traditional breed production are also supported. RSPCA s People s Choice Supermarket Award for the third year running, as voted for by the general public Compassion in World Farming s Good Dairy Award for our dedicated dairy supply chain (page 26). Higher baseline animal welfare standards were met across a range of own-brand products and all shell eggs and egg ingredients in own-brand products were at least free-range Standards introduced for pork and pork sausage products in April 2011 Elmwood sales E.P. Continue to ensure that shoppers operating on a variety of budgets have the opportunity to support higher baseline animal welfare standards, and that all shell eggs and egg ingredients in own-brand products are at least free-range E.P. Measure and report the impact of Elmwood standards on animal welfare E.P. Continue to pursue higher welfare standards across our meat and fish, converting our own-brand salmon to Freedom Food standard in Number of lines Total sales 38m 57m 111m 154m RSPCA Welfare Freedom Food sales Number of lines Total sales 28m 51m 54m 63m 74m Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people The Co-operative Group Sustainability Report

3 Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people Product range and sales continued Eggs and milk Since 2008, all shell eggs sold have been, as a minimum, free-range. 95% of our own-brand eggs are Freedom Food accredited, requiring lower outdoor stocking densities than conventional freerange standards, and the rest are certified organic. We only use free-range eggs as ingredients in our own-brand products. In 2011, 97% of own-brand fresh milk was assured under the National Dairy Farm Assured Scheme. The remainder was certified as organic by the Soil Association. Poultry, meat and fish Poultry All our own-brand fresh and chicken and turkey continues to be produced, as a minimum, to Elmwood standards and exceed conventional farm assurance standards by stipulating lower stocking densities, more environmental enrichment and for birds to be fed a high cereal vegetarian diet. Our premium fresh chicken is RSPCA Welfare Freedom Food free-range accredited. Sourced from the UK, birds have access to range outdoors for at least half their lifetime and they have a lower daily growth rate than conventional standards. All our own-brand fresh and turkey products are sourced in the UK and 80% (100% of fresh and ) of all our turkey products are now produced using birds reared to Elmwood, RSPCA Welfare Freedom Food or free-range standards. For Christmas 2011, we sourced premium-range fresh turkey products from free-range traditional Bronze breed turkeys reared on The Co-operative s Stoughton Estate farm, where the birds have access to open pasture to forage. Free-range turkey standards require stocking densities of approximately half those of conventional standards, a higher minimum slaughter age and environmental enrichment. As of 2012, 223 farms were adapted to meet Elmwood poultry production standards (2011: 220). All own-brand fresh duck continues to be reared to RSPCA Welfare Freedom Food standards, which stipulate access to open water sources to allow birds to engage in natural behaviours, such as preening and reconditioning feathers. In focus The Co-operative Dairy Group In August 2011, we set up a long-term dedicated supply chain with over 220 British dairy farmers (the Co-operative Dairy Group). The Group will provide the equivalent of approximately 85% of our own-brand milk, which will be added to the supply pool of our own-brand milk processor and distributor. Contracted farmers are required to monitor and report on key welfare indicators such as lameness and body condition. Own-brand fresh & poultry sales, 2011 chicken turkey Fresh duck Own-brand as a proportion of total sales 100% 88% 99% UK sourced 100% 100% 100% Proportion of own-brand meat, poultry and fish sales 33% 1% <1% Elmwood 95% 99% RSPCA Freedom Food free-range 11 5% RSPCA Freedom Food 100% Free-range 1% Beef All our own-brand fresh and beef is assured to UK conventional farm assurance standards. Animals are either reared outdoors on grass pasture with shelter provided during harsh weather, or on grass pasture during summer and then in opensided barns on silage during the winter. The ingredients for all fresh premium products are sourced from traditional Scottish reared Aberdeen Angus breed cattle. Own-brand fresh & beef sales, 2011 Own-brand as a proportion of total sales beef 97% UK sourced 100% Proportion of own-brand meat, poultry and fish sales 24% Farm Assurance 100% 3 The Co-operative Group Sustainability Report 2011

4 Pig meat In April 2011, we introduced Elmwood pig meat standards for all fresh pork and pork sausage products, which stipulate higher minimum space and housing requirements than conventional farm assurance standards. Pigs must be reared and finished in naturally ventilated and lit barns or yards with straw bedding and enhanced environmental enrichment. The ingredients for all premium pork, bacon and sausage products are sourced from RSPCA Welfare Freedom Food accredited, outdoor-reared, traditional Hampshire breed pigs. RSPCA Welfare Freedom Foods standards also exceed conventional farm assurance standards by stipulating the animals are born in free farrowing outdoor systems and spend half their life from birth to fattening outdoors. As of 2012, approximately 100 farms meet Elmwood pig meat production standards. Lamb Our own-brand fresh and lamb is sourced on a seasonal basis to UK conventional farm assurance (40%) and New Zealand farm assurance scheme standards (60%). All fresh lamb is reared outdoors on grass pasture with access to shelter during harsh weather. Ingredients for all fresh premium-range products 12 are sourced, on a seasonal basis, from Freedom Food lamb reared in hefted flocks 13. Castration is not allowed for animals intended for slaughter below the age of sexual maturity. Fish All our premium-range farmed salmon products are Freedom Food accredited. The Co-operative Food s Responsible Fish Sourcing Policy (page 65) requires that all farmed fish are stunned using an approved method prior to slaughter. Own-brand fresh & pig meat sales, 2011 pork Fresh bacon sausage Own-brand as a proportion of total sales 95% 88% 62% UK sourced 100% 100% 100% Proportion of own-brand meat, poultry and fish sales 8% 17% 7% Farm Assurance 2% 94% 19% Elmwood 94% 38% RSPCA Freedom Food 4% 6% 43% Own-brand fresh & lamb sales, 2011 Own-brand as a proportion of total sales Own-brand fresh & fish sales, 2011 Own-brand as a proportion of total sales Proportion of own-brand meat, poultry and fish sales lamb 100% UK sourced 40% Proportion of own-brand meat, poultry and fish sales 3% Farm Assurance 99% RSPCA Freedom Food 1% fish 93% 6% Farm Assurance 50% RSPCA Freedom Food (salmon) 3% Wild caught 47% Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people The Co-operative Group Sustainability Report

5 Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people Animal testing of toiletry and household products Indicator: Sales of accredited toiletry and household products Target 2011 Progress Target 2012 E.P. Continue to take the lead on the issue of animal testing of cosmetic and household products Since 1985 and 1997 respectively, none of our own-brand toiletry or household products and their ingredients have been tested on animals. All own-brand products continue to carry the British Union for the Abolition of Vivisection s (BUAV) rabbit and stars logo, proving that they, and their ingredients, have been independently assured as not Bank screening of finance During 2011, 63 banking and finance opportunities were referred to the Ethical Policy Unit in connection with animal welfare (2010: 69). We declined nine with an estimated cost of 542,500 gross income foregone (2010: six, at a cost of 168,000). All own-brand toiletry and household products are accredited to the BUAV Humane Cosmetics and Humane Household Products Standards, operating to strict fixed cut-off dates having been tested on animals. BUAV conducts audits every three years to monitor compliance and conducted an audit of our products in April Sales of accredited products ( m) Responsible finance Indicator: Consideration of animal welfare in the provision of finance Banking and finance declines 2011 E.P. Continue to take the lead on the issue of animal testing of cosmetic and household products Food producer (three instances) 6m lending for a business involved in the intensive, indoor production of pigs. Banking facilities for businesses involved in the intensive, indoor fattening of pigs. Clothing manufacturer 10m lending to a designer goods manufacturer that used rabbit and fox fur and exotic animal skins in its products. Testing facilities (two instances) 600,000 lending and deposit-taking facilities for businesses providing laboratory animal testing services for cosmetics and household goods manufacturers. Abattoir (two instances) Banking for abattoirs involved in slaughter and supply of lamb. No assurance of animal pre-stunning. Chemicals distributor Deposit-taking facilities for a business involved in the distribution of cosmetic and household product ingredients. The business did not have a policy on animal testing or a fixed cut-off date for the testing of products or ingredients. Household products Toiletries m 4.0m m 4.1m m 3.7m m 5.5m m 5.2m Estimated income foregone ,000 70,000 30,000 29,500 11,000 5 The Co-operative Group Sustainability Report 2011

6 Accompanying notes Animal welfare 1 Defra (2010) Poultry and Poultry Meat Statistics www. archive.defra.gov.uk/evidence/statistics/foodfarm/food/ poultry/.../ppntc.pdf 2 Defra (2011) United Kingdom Cattle, Sheep and Pig Slaughter Statistics food/slaughter/ 3 Defra (2010) Poultry and Poultry Meat Statistics www. archive.defra.gov.uk/evidence/statistics/foodfarm/food/ poultry/.../ppntc.pdf 4 Products include beef, lamb and pork joints; steaks, chops, mince, burgers, sausages, bacon and gammon; whole chickens, turkeys and ducks; and chicken, turkey and duck steaks, fillets and portions. feedback We value your feedback. 5 Compliance with UK farm assurance standards, or national equivalents, is assured for all own-brand fresh and meat and poultry products. Outside the UK, suppliers are required to ensure, through independent third-party audits, that non-uk producers apply equivalent standards. 6 Quality Standard Marks are specifically applied to beef, lamb and pork products. 7 In accordance with Humane Slaughter Association species code of practice. 8 Compliance with UK farm assurance standards or national equivalents was assured for all own-brand UK-sourced fresh shell eggs, milk, turkey, duck, beef, lamb, chicken, pork, pig meat for sausage and bacon, and farmed salmon and trout. While compliance with farm assurance standards is similarly stipulated for other meat and poultry products (eg, non-uk cooked meats), and products that contain meat or poultry ingredients (eg, ready meals), evidence of application is much more difficult to secure. 9 Includes sales of Elmwood, RSPCA Freedom Food, organic, free-range and traditional breed products. Details of these welfare standards are provided throughout the chapter with further information available online. Figures include sales of prepared and ready to go products. 10 Egg sales account for approximately half of all Freedom Food sales (2010: 50%; 2009: 53%; 2008: 55%; 2007: 51%). 11 Ibid. 12 With the exception of burgers. 13 Sheep are born and reared on open hills throughout the year. There are no boundaries or fences to keep different farm flocks apart. Social responsibility UK communities International development and human rights Animal welfare Diet and health Responsible finance Social inclusion Inspiring young people The Co-operative Group Sustainability Report

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