The impact of Corporate Social Responsibility on animal welfare standards - Evidence from the cage-free egg industry (Rethink Priorities)

Executive Summary

Corporate social responsibility initiatives have become popular to address animal welfare issues, like commitments to source cage-free eggs to improve layer hen welfare. This paper investigates whether corporate cage-free egg commitments cause changes in the proportion of hens living in cage-free housing.

We attempt to answer this question with observational data and statistical methods to reduce bias.

• We create a new data set observing 44 countries over 13 years, tracking four variables: hen housing, corporate cage-free commitments, cage-free legislation, and highly pathogenic avian influenza (see Section 3.1).
• We use a correlated random effects model to identify the effect of commitments on housing separately from other factors that may bias our estimate (see Section 3.2.1).
• We test for potential bias due to: a causal feedback loop between commitments and housing; missing observations; a potential connection between Germany’s high imports and high commitments; and variable transformations (see Section 3.2.2).

We find that, on average within a given country, a one-commitment increase leads to a 0.035 (95% CI: 0.01 – 0.06) percentage point rise in the share of cage-free hen housing.

• Because of the large number of hens in the industry, the impact of a few new commitments per year is substantial. For example, the 16 new commitments made by Canadian food businesses in 2017 represent a 0.56 percentage point increase in Canadian cage-free housing, which in turn may affect nearly 147,000 Canadian hens (see Section 5).
• Our tests for potential bias suggest that our estimation method is robust to several different factors that typically affect observational studies (see Section 4). However, we acknowledge that some bias may still affect our results. Therefore, we place moderate confidence in our findings.