An exploration of animal welfare accountability of global apparel companies

This thesis explores the animal welfare accountability demonstrated by global apparel companies. The thesis consists of two separate but related research components. The first aims to evaluate global apparel companies’ animal welfare accountability by assessing the quality of their animal welfare-related disclosures. The second seeks to explain the differences found, in the first research component, in the quality of the apparel companies’ animal welfare disclosures.
The first research component is normative in nature. An accountability model incorporating the concept of ‘surrogate stakeholder accountability’ is adapted to prescribe to whom, what and how (or where) information about animal welfare should be disclosed. The Animal Welfare Disclosure Index utilised in this research is adapted from the 2020 Business Benchmark on Farm Animal Welfare, which was developed by Amos et al. (2021). This thesis adapts and utilises evaluation questions from four disclosure categories of the 2020 Business Benchmark on Farm Animal Welfare. These four disclosure categories are ‘management and commitment’, ‘governance and implementation’, ‘leadership and innovation’, and ‘performance reporting’. The Animal Welfare Disclosure Index developed for this research then contains 26 evaluation questions which are applied to assess disclosure quality. Content analysis of publicly released ‘accounts’ collected from 114 of the world’s largest public apparel companies is undertaken to determine: (1) What aspects of animal welfare information are disclosed by apparel companies? (2) Do the animal welfare disclosures of apparel companies appear to satisfy the expectations of interested stakeholders? and (3) How (or where) has animal welfare information been disclosed by apparel companies? Such ‘accounts’ include recently released annual reports, corporate social responsibility or equivalent reports, dedicated corporate social responsibility or equivalent webpages, and apparel products’ online swing tags.
The first research component shows that the apparel companies typically reported animal welfare information related to only three evaluation questions within the Animal Welfare Disclosure Index. These three evaluation questions are: Question 1 Does the company acknowledge animal welfare as a business issue? Question 2 Does the company disclose an overarching corporate animal welfare policy? and Question 17 Does the company disclose information about how to assure its animal welfare to a prescribed standard? The results show that the sample of apparel companies less widely reported information relating to 13 evaluation questions within the Animal Welfare Disclosure Index, and failed to address ten evaluation questions.
The results indicate that apparel companies’ animal welfare disclosure quality falls short of what would be expected by surrogate stakeholders (primarily animal welfare-based NGOs). Quality scores of disclosures pertaining to animal welfare range from 0 to 18 (out of a maximum possible score of 26), meaning that the quality of animal welfare disclosure varies widely across companies. European apparel companies generally disclose higher-quality animal welfare information, followed by apparel companies from Oceania, North America, Asia, Africa and South America. The disclosure quality of apparel companies’ animal welfare information also differs within the same region or country. The top-seven apparel companies within the sample that demonstrate a relatively higher quality of animal welfare accountability are Tesco Plc (United Kingdom), Carrefour (France), Woolworths Holdings Limited (South Africa), Woolworths Group Limited (Australia), Esprit Holdings Limited (Hong Kong SAR, China), Ralph Lauren Corporation (United States) and Marks and Spencer Group Plc (United Kingdom). Their animal welfare disclosure addressed at least 50% of the 26 questions comprising the Animal Welfare Disclosure Index.
The first research component also shows that dedicated corporate social responsibility or equivalent webpages appear to be the most informative source of animal welfare disclosure. Corporate social responsibility or equivalent reports appear to be the second most informative source of disclosure about animal welfare. Apparel companies’ animal welfare disclosure within annual reports was generally found to be lacking. Apparel products’ swing tags appear to be the least informative source of animal welfare disclosure. Taken as a whole, animal welfare accountability being demonstrated by public apparel companies worldwide is deemed to be insufficient. However, the animal welfare accountability being demonstrated differs significantly among apparel companies. It is such variations that led to the second research component of this thesis, which sought to explain such variations.
The second research component is positive (as distinct from normative) in nature, with an exploratory research objective; that is, it explores how an assemblage of a set of variables might come together at a point in time to explain variations in the quality of apparel companies’ animal welfare disclosure. Four research questions are investigated in the second research component. These four research questions are: (1) What explanatory variables have been suggested within the prior literature to explain differences in the quality of social and environmental disclosure of companies? (2) Which explanatory variables identified in the prior literature could be used to explain differences in the quality of companies’ disclosure with respect to animal welfare? (3) When applied to a sample of global apparel companies, how do particular variables appear to influence the quality of disclosure about animal welfare? and (4) Does it makes sense to use these variables together? That is, logically, should they be used in combination? This component, which was based upon an extensive Structured Literature Review, generates a body of potential explanatory variables that can be used to explain variations in the quality of corporate social and environmental disclosure.
Through the Structured Literature Review, the second research component identifies specific explanatory variables that are most likely to provide meaningful explanations of corporate social and environmental disclosure quality. Five corporate characteristics-related specific explanatory variables (corporate social and environmental performance, firm size, firm age, financial leverage, and return on assets), five internal corporate environment-related specific explanatory variables (board gender diversity, board size, board independence, the adoption of standardised social and environmental reporting frameworks, and corporate ownership concentration) and four external institutional context-related specific explanatory variables (news media coverage, legal framework, animal welfare-related regulatory pressures, and press freedom) are selected and then used in this thesis to explain the quality of apparel companies’ animal welfare disclosure.
In order to provide more holistic explanations of apparel companies’ animal welfare disclosure quality, the second research component then considers corporate characteristics, internal corporate environment and external institutional context as three broad composite independent variables, and selected specific explanatory variables as indicators of these three composite independent variables. The second research component uses Partial Least Squares Structural Equation Modelling to explore relationships between corporate characteristics, internal corporate environment, external institutional context and the quality of apparel companies’ animal welfare disclosure. Partial Least Squares Structural Equation Modelling is then used to explore the importance of specific explanatory variables to the corresponding composite independent variables. The Partial Least Squares Structural Equation Modelling analysis shows that the variations in the quality of apparel companies’ animal welfare disclosure are explained by the nexus of three broad composite independent variables: corporate characteristics, internal corporate environment, and external institutional context. Internal corporate environment appears to have the most significant direct-positive influence on the quality of apparel companies’ animal welfare disclosure, followed by the direct-positive influence of corporate characteristics and then the direct-positive influence of external institutional context.
The Partial Least Squares Structural Equation Modelling analysis also shows that corporate social and environmental performance is a specific explanatory variable that is more important than financial leverage in contributing to the direct-positive significant influence of corporate characteristics on the quality of apparel companies’ animal welfare disclosure. Board gender diversity, board size, and the adoption of standardised social and environment-related reporting frameworks, are three specific explanatory variables that are more important than corporate ownership concentration and board independence in contributing to internal corporate environment, the latter which, in turn, positively and significantly impacts the quality of apparel companies’ animal welfare disclosure. The direct-positive significant influence of external institutional context on the quality of apparel companies’ animal welfare disclosure is mainly attributed to two specific explanatory variables: animal welfare-related regulatory pressures, and news media coverage. The Partial Least Squares Structural Equation Modelling analysis further shows that, amongst the above specific explanatory variables, board gender diversity and animal welfare-related regulatory pressures are ....