Category Archives: Companies

UK biotech companies call for more human-relevant research methods to meet patient needs and increase profits


Industry leaders say that the key issue is the low predictive power of existing pre-clinical models, with academic research supporting this hypothesis. We will address this by bringing more patient-derived approaches into the mainstream. These include advances in patient derived targets and biomarkers, and more complex models, such as organoids, for discovery and pre-clinical research. These technologies need to be woven throughout the discovery process to place the patient at the heart of the research process.

A new report from the UK has pointed to a productivity crisis in pharmaceutical research: new drugs have a high failure rate, the number of drugs launched per $1bn of research and development spending has fallen nearly thirty-fold over the last 40 years, leaving the pharmaceutical industry return on capital now at only 3.2%.

Let me briefly recap the phases of development that a new drug undergoes. Preclinical research is the stage of research that occurs before the drug is tested on humans. It usually involves in vitro and in vivo tests. In vitro (Latin: in glass) tests are sometimes called test-tube experiments, for example microorganisms in Petri dishes. More recently developed in vitro methods involve omics, such as genomics, proteomics or metabolomics.  In vivo (Latin: within the living) tests are conducted on living organisms or cells. In biomedical research, in vivo methods generally involve animal experiments.

Preclinical research is followed by three stages of clinical trials on humans. Phase I is usually conducted for safety testing. If the drug is found to be safe, it is tested in Phase II to see whether it works as intended. Phases I and II involve small numbers of humans. If the drug is found to be safe and effective, it proceeds to Phase III, where it is tested on a larger number of people and compared to placebo or other treatments for the condition under study. Sometimes there is a fourth phase: after the drug has been marketed, further information is collected on effectiveness of the drug and side effects, or to investigate the effectiveness of the drug for a different condition or in combination with other drugs.

Three pharmaceutical industry groups collected data on clinical development success rates from 2006-2015 and found the following average rates:

probability of success

NDA – New Drug Application to the FDA (US Food and Drug Administration)
BLA – Biologic License Application to the FDA

After in vitro and/or in vivo testing, on average only 9.6% of new drugs achieved approval from the FDA. Cancer drugs had the lowest approval rate (5.1%), haematology drugs the highest (26.1%). A dismal – and very expensive – failure rate.

Back to the UK report. Based on over 100 in-depth interviews with senior executives of UK drug discovery companies and electronic surveys of 250 experts, the authors summarised the problems as follows:

  • Global R&D productivity is under unprecedented pressure
  • The model of medicines R&D must be radically reshaped to meet patient needs
  • A key problem is reliance on using inadequate models for human diseases
  • Commercialising emerging technology will require new models of collaboration
  • Data science is now indispensable to medicines R&D: research data is now generated in such high volumes that the ability to harness it has become a critical factor in developing new medicines
  • It is imperative for the UK to provide industry with straightforward, well-governed access to consented patient data and human tissue samples – this is an acute problem for SMEs*
*SMEs – small and medium-sized enterprises

The authors of the report observed that too much of the preclinical research is patient-free and relies on animal models of disease and toxicology that are a poor approximation of humans. They wrote that drug discovery must be ‘humanised’:

Our interviews and surveys identified many emerging technologies that can ‘humanise’ the drug discovery process. These technologies make the early stages of research more predictive of how a drug will work in real life. They can generate a wealth of humanised in-vitro data, resulting in better drug candidates entering human trials. The benefit is lower attrition and therefore improved research productivity for industry.

… and pointed to new and emerging technologies that don’t involve animal research:

There are many emerging technologies that can make pre-clinical drug development more humanised. Most are derived from human stem cells and the resultant technologies that allow us to create and sustain human tissue in the laboratory. Just 20 years ago, keeping such tissue alive in the lab was a challenge. Now, thanks to pluripotent stem cells, advanced culture methods, microfluidics and precision gene editing we can manipulate the way such tissue grows and differentiates, even down to the substructures of cells and the stratum of the disease which the model reflects. When linked to large human cohorts, we can develop libraries of disease models that reflect the molecular spectrum of human disease, just as the Sanger Centre has done with their library of cancer cell lines. These complex predictive models, when used appropriately, have the potential to be much more discriminating in their ability to weed out the false positives in drug discovery i.e. those compounds that are too toxic, or insufficiently disease modifying.

The report also called for better collaboration between all stakeholders, the sharing of data and better access to consented patient data and human tissue samples.

Data from failed trials and failed pre-clinical projects could be transformative in reducing rework.

Further, a lack of validation efforts was noted. The experts that were interviewed said that ‘many potentially powerful human in vitro models remain in academia. There they have no obvious commercialisation path in the UK, given they often lack IP and so are hard to spin-out.’ Several people pointed out that validation is not a good fit for grant funding.

Many reasons tied up with their careers hold researchers in academic institutions back from leaving animal experiments behind:

It is important to recognise that researchers can be reluctant to invest time and money in implementing a new technique, or to replace an animal model that has served as the basis of their research for many years. … There may be concerns about a lack of historic data comparability, or invalidating past results. Setting up a new model can require additional technical expertise or development of new infrastructure. Referees are familiar with data from the ‘gold standard’ animal models, and may request additional in vivo data to be generated to support in vitro findings. These factors can delay publication in a highly competitive research environment and result in a lack of motivation to change models. (Jackson and Thomas 2017)

Researchers in the pharmaceutical industry are free of some of these constraints. The animal model research paradigm is truly outdated and better, human-relevant methods and technologies are available and are being further developed. This report by Medicines Discovery Catapult and the UK BioIndustry Association is a welcome guide to a future of biomedical research that serves patients, leaves behind cruel and unnecessary animal experiments, and promises a better return on investment for biomedical companies.


Many thanks to Andrew Tilsley for his permission to use an image of his artwork ‘Cures for Diseases’.


Australia’s new cosmetics testing bill – a welcome move


Source: Flickr/ Lynette Olanos

During the 2016 election campaign, the Australian Government committed to introduce a ban on animal testing of cosmetic products. The Industrial Chemicals Bill 2017 has been introduced in the House of Representatives on 1 June 2017 to implement this commitment. The following sections of the bill refer to animal testing:

103 Ban on animal test data for determining category for cosmetics

(1) Without limiting paragraph 102(1)(b), if an industrial chemical is to be introduced     for an end use solely in cosmetics, rules made for the purposes of that paragraph may include the requirement mentioned in subsection (2).

(2) The requirement is that, when determining the category of introduction for such an industrial chemical, a person must not use animal test data obtained from tests conducted on or after 1 July 2018 in circumstances prescribed by the rules.

168   Ban on animal test data for applications for cosmetics

(1) Without limiting subsection 167(1), if an industrial chemical is to be introduced for an end use solely in cosmetics, an application under this Act relating to the introduction must meet the requirement in subsection (2).

(2) The requirement is that the application must not include animal test data obtained from tests conducted on or after 1 July 2018 in circumstances prescribed by the rules for the purposes of this subsection.

Government legislation to support the end of cosmetic animal testing and trade in Australia is very welcome. However, the draft legislation offers a loophole which would allow newly animal tested cosmetic ingredients to be introduced to the Australian market after the bill becomes law. This would fail to meet the Coalition’s election promise and the expectations of the Australian public to fully end cosmetics testing in Australia.

The loophole rests on the word solely. Only new animal test data used in introductions which are solely for cosmetics use would be prohibited. If the new chemical ingredient would also be used for other purposes, for example in cleaning products, animal testing would still be allowed.

A joint statement by #BeCrueltyFree Australia and Humane Research Australia observes:

This is very welcome progress; however, as not all substances are used exclusively as cosmetic ingredients, some cosmetic ingredients will still be able to be newly animal tested and introduced into Australia under the current proposed language. This is an important departure from existing bans in the European Union, Norway, Switzerland, Israel, and India, which have all banned the use of newly animal-tested ingredients when introducing or marketing cosmetics.

How many of the new chemicals might be used for multiple purposes? A 2013 report by the European Commission stated that:

… large cosmetics manufacturers estimated that, on average, around 10% or less of the new ingredients used by large cosmetics manufacturers were new to market (i.e. have not previously been used in other product sectors).

Dropping the word solely from the bill might fix this loophole. It would ensure that the ban applies to all cosmetics ingredients, and the use of chemicals for non-cosmetic purposes would not be impacted by the ban.

What would happen if a chemical not previously used in cosmetics has been tested in animals and a human health risk has been assumed? Obviously, such a chemical would not be introduced for use in cosmetics, irrespective of the ban (this case would represent disqualifying a chemical for use in cosmetics, rather than introducing one).

On the whole, while this bill does not change much for companies that manufacture cosmetics, it sends a message that Australia does not support cruel and unnecessary testing on animals – if for cosmetics only.

The bill will not have much impact on the number of animals used in animal experiments in Australia, as – to my knowledge – no cosmetics testing on animals has taken place here for some time. But is it a first step towards phasing out animal experimentation for other purposes, too?


Source: Flickr/ Melody


Other countries have made much more progress in this regard. For example, the Parliament of the Netherlands in 2016 passed a motion to phase out all research on non-human primates, and by 2025 the Netherlands aims to become a world leader in animal-free science. The Netherlands National Committee for the Protection of Animals Used for Scientific Purposes (NCad) has provided a schedule for phasing out animal procedures.

In the EU, the Directive 2010/63/EU on the protection of animals used for scientific purposes requires national governments to assist in the advancement of alternative methods to animal testing and to promote the use of non-animal methods.

Unlike Australia, the European Union keeps track of progress made in developing and using alternatives to animal testing. The European Chemicals Agency has just published its third report on “The use of alternatives to testing on animals for the REACH Regulation”. It looks promising:

Registrants use existing information and alternatives to animal testing. Altogether, 6290 substances were analysed for the report. Out of these, 89 % have at least one data endpoint where an alternative was used instead of a study on animals.

The most common alternative method was using information on similar substances (read-across), used in 63 % of the analysed substances, followed by combining information from different sources (weight of evidence, 43 %) and computer modelling (QSAR prediction, 34 %).

In the US, the Federal Accountability in Chemical Testing (FACT) Act was introduced in Congress earlier this year:

The FACT Act would improve reporting by EPA, FDA, NIH, USDA and other government agencies about their efforts to replace inefficient, multi-million-dollar animal tests with faster, less costly and more effective alternative methods for assessing the safety of chemicals, drugs, foods, cosmetics and other substances.


Source: Flickr/ pumpkincat210


However, it’s anyone’s guess if or when this bill might become law, given that the U.S. Department of Agriculture has removed public access to tens of thousands of reports relevant to animal welfare.

Banning cosmetics testing on animals in Australia has been long overdue and is a welcome contribution towards the global move away from animal experimentation more broadly.



PS – On 6/06/2017 the Humane Cosmetics Act was introduced in the U.S. House of Representatives. See this press release.

The organs-on-chips market

After looking at the animal model market, I wondered about industry predictions for new developments in biomedical research that are human-relevant. Perhaps the field known as organs-on-chips holds the greatest promise for physiologically relevant, precisely controlled, and scalable engineered systems for use in the drug development process.

According to the Wyss Institute for Biologically Inspired Engineering at Harvard University, human organs-on-chips are microchips lined by living human cells that can be used in drug development, disease modelling and personalised medicine.

This is what they look like:

The development and testing of new drugs takes many years and is expensive. Very expensive. The cost of developing a new prescription drug is now around $2.6 billion. Traditionally, animals such as mice and dogs have been used in the development of  drugs. But around 90% of new drugs that have been found to be safe and effective in animals fail in clinical trials with humans.

To understand this high attrition rate between drug development and approvals, it is imperative to consider the drawbacks of the current methods of preclinical testing. Traditional 2D cellculture models can be effective in providing a broad indication of
compound efficacy and toxicity; however, they fail to represent cell function and physiology accurately because these cultures are monolayers as opposed to the 3D structures found in an intact organ and hence important tissue–tissue interactions are absent. Furthermore, upon the ingestion of a drug, it undergoes important transformations that allow it to be absorbed, distributed, metabolized and excreted (ADME). Examining these processes provides important information on the pharmacokinetics (PK) of the drug including dose, concentration and toxicity profiles. These parameters are traditionally tested in animals such as rodents and dogs along with a determination of safety and efficacy. However, a simple extrapolation of the PK and toxicity profiles from animals to humans is inaccurate owing to the vast differences in the genomes between the two species, as in the case of TGN1412. The development of assays that can better predict the safety, pharmacology and toxicity of a drug in humans is of paramount importance. Organs-on-chips is one such system that has the potential to reduce the dependence on animal testing and provide a more accurate readout of the safety and efficacy profile of a drug compared with conventional methods.
Source: Balijepalli, A., & Sivaramakrishan, V. (2017). Organs-on-chips: research and commercial perspectives. Drug Discovery Today, 22(2), 397-403.

In 2010, Donald Ingber at the Wyss Institute developed the first organ-on-a-chip, a lung-on-a-chip. Since then, academic institutions and private companies – sometimes working in partnership – have added miniature models of, for example, the liver, kidney, heart, bone marrow, cornea, brain, spleen and the human gut.

A multidisciplinary team at the Wyss Institute have also developed a chip that smokes cigarettes like a human. So there is no excuse to force mice to inhale cigarette smoke, as researchers at the Hunter Medical Research Institute and The University of Newcastle have done.

An organ-on-a-chip is about the size of a human thumb and “made from a flexible, translucent polymer. Microfluidic tubes, each less than a millimeter in diameter and lined with human cells taken from the organ of interest, run in complex patterns within the chip. When nutrients, blood and test-compounds such as experimental drugs are pumped through the tubes, the cells replicate some of the key functions of a living organ“.

Organs-on-chips can be used to study many biomedical phenomena. Apart from drug development and toxicity testing, other possible uses include, for example, personalised medicine (where stems cells derived from individual patients could be used to identify which therapies might be likely to succeed) or testing responses to biological and chemical  weapons.

As an alternative to conventional cell culture and animal models, human organs-on-chips could transform many areas of basic research and drug development. They could be applied to research on molecular mechanisms of organ development and disease, on organ-organ coupling and on the interactions of the body with stimuli such as drugs, environmental agents, consumer products and medical devices. Fundamental questions that might be addressed include how microenvironmental cues regulate cell differentiation, tissue development and disease progression; how tissues heal and regenerate (e.g., mechanisms of control of angiogenic sprouting and epithelial sheet migration); and how different types of immune cells and cytokines contribute to toxicity, inflammation, infection and multi-organ failure. When combined with patient-specific primary or iPS cells, or with gene editing technologies (e.g., CRISPR) to introduce disease-causing mutations, this technology could be used to develop personalized models of health and disease.
Source: Bhatia, S. N., & Ingber, D. E. (2014). Microfluidic organs-on-chips. Nature Biotechnology, 32(8), 760-772.

A recent article in the journal Drug Discovery Today provided the following examples of investment in organ-on-chip developments:

These are only a few examples of work on organs-on-chips. Worldwide, it is considered a multi-million, or even billion dollar market. For example, Yole Développement estimates that “the market could grow at a compound annual growth rate from 2017-2022 of 38-57% to reach $60M-$117M in 2022.” Another company, Accuracy Research, expects the organs-on-chips market to grow around 69.4% over the next decade to reach approximately $6.13 billion by 2025.

Large pharmaceutical and cosmetics companies are expected to start using organs-on-chips. Some companies have already partnerships with organs-on-chips developers, such as L’Oréal, Pfizer, AstraZeneca, Roche and Sanofi.

Ethical concerns are also at the heart of this new market: more than one hundred million animals are used in laboratory experiments worldwide every year, and could be replaced by pieces of microfluidic technology. Source: Yole Développement

Where does Australia sit in this market?

Some projects at the Australian Institute for Bioengineering and Nanotechnology, University of Queensland involve “the development of tumour-on-a-chip, organs-on-a-chip for rapid preclinical evaluation of potential nanomaterials for targeted therapeutics”. At the International Conference on Biomedical Engineering in December 2016, Professor Justin Cooper-White from this institute presented a keynote address on “Human kidney organogenesis from pluripotent stem cells on a chip”. There were other presentation on organs-on-chips, but none from Australia.

Two PhD Scholarships Bioengineering 3D in vitro model systems were recently advertised by Swinburne University of Technology.

A few academics with affiliations to Australian universities have published articles on organs-on-chips. However, it is unclear whether they are involved in the development of this technology. I could locate three articles in peer-reviewed journals on the topic:

  1. Nauman Khalid, a Postdoctoral Research Fellow at Deakin University has co-authored two articles, titled “Recent lab-on-chip developments for novel drug discovery” and “Industrial lab-on-a-chip: design, applications and scale-up for drug discovery and delivery“. I could not locate any information on the Deakin University website that links him to current work on organs-on-chips.
  2. One of the 14 authors of “Screening out irrelevant cell-based models of disease” lists Queensland University of Technology as an affiliation. In the article, the authors discuss new opportunities for exploiting the latest advances in cell-based assay technologies, of which organs-on-chips are one.
  3. Researchers from RMIT had a review of “Successes and future outlook for microfluidics-based cardiovascular drug discovery” published.


Where is the investment in organs-on-chips?

The published outcomes of the 2016 NHMRC Grant Application Round include two projects that involve work on organs-on-chips. The project descriptions are as follows:

Neurodegenerative diseases such as dementia and motor neuron disease are a major health burden for Australia and new approaches to treatment are urgently required. Essential trace elements such as copper, zinc and iron show major changes in neurodegneration, however, we do not understand how this drives disease processes. This proposal will develop an innovative 3D ‘brain on a chip’ cell model to probe the role of trace elements in brain pathology and identify exciting new treatments options.


New human cell culture models of Alzheimer’s disease are urgently needed to help translate drugs into successful patient outcomes. In this proposal we will develop an Alzheimer’s disease brain-on-a-chip that contains the major human brain cell types and neuropathological features of the Alzheimer’s. We will demonstrate the applicability of the model for identifying new Alzheimer’s disease drugs and diagnostics and show that the model can be readily adopted by Australian Alzheimer’s researchers.

Total grant funding for all 1,056 funded projects adds up to $828 million. The extent of the funding for the two organs-on-chips projects is not obvious from the published data, nor at which university, research institute or hospital the work will be undertaken.

I could not find information about investment on this technology by private companies.

body-on-a-chip Khalid et al 2017

Body-on-a-chip. Source: Khalid, Kobayashi & Nakajima, 2017.

Perhaps there is more work on organs-on-chips occurring in Australia, but I couldn’t find relevant information (I searched Google and PubMed). By and large, in Australia researchers continue to use archaic methods that hurt animals, are costly and ineffective. Despite the development of more human-relevant methods, the use of animals for research and education purposes is not decreasing in Australia.

The latest available statistics have just been published by Humane Research Australia. They “show that approximately 10.27 million animals were used in research and teaching in Australia in 2015, although this high number is largely due to NSW counting 4,123,049 native animals in environmental studies which involved observation only.” This compares to approximately 7 million animals in 2014.

Here we have a potentially multi-billion dollar market, and Australia is fiddling at the edges.



Meat, a not so palatable investment?

Recently, I have noticed warnings by the finance industry about investing in meat. While many of us have known for some time that meat is bad news for human health, the environment and of course the animals whose flesh is eaten, it’s good news that the finance industry starts pointing out the unsustainability of the meat industry.

The meat industry is powerful, and proclaiming the obvious can lead to a backlash. For example, in June this year the Bayer Crop Science Twitter account reportedly suggested that going vegetarian can cut a person’s carbon footprint in half. The tweet has since been deleted and Bayer has apologised to the industry. Bayer apologised for expressing a view based on evidence, but unwelcome to Bayer’s business partners:

Source: Twitter/ @Bayer4Crops

Source: Twitter/ @Bayer4Crops

Last month, a coalition of 40 institutional investors launched an engagement with 16 multinational food companies highlighting the risks of investing in industrial animal production. The coalition represents investments of US $1.25 trillion and includes investors such as Swedish state pension funds AP2, AP3 and AP4, Aviva Investors, Boston Common, Coller Capital, Folksam, Nordea and Robeco. Australian Ethical Investment is also part of the coalition. The investors are urging food companies to transition to plant-based sources of protein.

The investors are responding to a recent Oxford University study which calculated that if global diets reduced their reliance on meat it could lead to healthcare – related savings and avoided climate damages of $1.5 trillion by 2050. The analysis report also points to regulatory trends as a driver for corporate action – such as Denmark’s consultation on the introduction of red meat tax and the Chinese government’s plan to reduce its citizens’ meat consumption by 50%.

The company Nestle’s response is reported in an article on the website:

A Nestle spokeswoman said the company did not use much meat, “so our main strategy is not to focus on replacing the meat that we do use as its impact would be minimal. Our main opportunities lie in innovating new products using alternate proteins”.

Meanwhile, reports that “Tech Companies Join Fight Against America’s Top Killers”. The article provides examples of tech companies that give health care providers and patients tools to help them with the transition to a plant-based diet, thus preventing and fighting chronic diseases.

If the pharmaceutical industry produced a pill that provided the healing power of a plant-based diet, it would be a blockbuster.’ – Dr. Rob Ostfeld.

Tyson Foods is one of the worlds largest meat processors. So it might be surprising that Tyson is investing in Beyond Meat, a company that produces plant-based alternatives to meat. Taking a 5% stake in Beyond Meat is considered a shrewd move. It probably is, given that people in the US are eating more plant-based foods and this is reflected in (plant-based) industry growth.

In Germany, large meat processors are now in competition with smaller companies that produce meat alternatives, and some of the latter fear they may be pushed out of the market. Two years ago, Rügenwalder Mühle started with a side-line of plant-based sausage and meat products, and many other meat processors have since followed.

Research conducted jointly last year by the NPD Group, Midan Marketing and Meatingplace, an industry publication, found that 70 percent of meat eaters said they used a meat substitute in place of meat protein at least once a week. And 22 percent said they were using such substitutes more frequently than a year earlier.

The trend away from meat towards plant-based foods is evident not just in the US, but also in other countries, such as Australia, Germany, the UK, Denmark and the Netherlands. The finance industry does well to take note.


Further reading

Alan Briefel (2016) Why factory farming is becoming a major risk to portfolios.

FAIRR and Share Action (2016) The future of food: The investment case for a protein shake up.

Kirschner’s Korner (2016) Beyond meat CEO responds to concerns about Tyson Foods investment

Neal Barnard (2016) FDA: don’t label meat ‘healthy’

Make your vote count to #BanLiveExport

Live export – Can you think of a more unethical, foul, government sanctioned industry in Australia? I can’t.

The media have reported for years about the appalling conditions on live export ships and extreme cruelty in the destination countries. It’s usually Animals Australia’s courageous investigators who bring the atrocities to the public’s attention.

A week ago, Animals Australia brought us horrific footage of Australian cattle being bludgeoned to death with sledgehammers.

The government’s response: an investigation.

Yesterday, the ABC reported that a government employed veterinarian had been removed after she documented the conditions on life export ships:

The Federal Government removed a respected veterinarian after she presented evidence of cruelty and appalling conditions on board Australian live export ships, according to documents obtained by the ABC.

The Australian Livestock Exporters’ Council has admitted they raised concerns about veterinarian Dr Simpson with the Department of Agriculture.

The Sydney Morning Herald quoted our Prime Minister Malcolm Turnbull this week who said Australia had “very, very strong animal welfare standards. We condemn cruelty to animals – full stop”. How can the Prime Minister condemn animal cruelty yet allow this horrific trade to continue?

Meanwhile, the Australian Meat Industry Employees Union Newcastle & Northern Branch today listed the flights on live export supplier Stanbroke’s private jet enjoyed by Deputy Prime Minister Barnaby Joyce and his family:

The uncovered ‘gifts’ from suppliers are evidence of Joyce’s close relationship with Stanbroke and calls into question each and every one of his decisions on live exports.

No wonder the Minister has doubled down on his commitment to live exports after last night’s revelations that industry figures pressured the Department of Agriculture into sacking its own veterinary staff for doing their job and reporting the simple truth about animal cruelty

Also today, Barnaby Joyce announced further funding for the live export industry:

If re-elected, the Coalition would also commit $8.3 million dollars to implement the government and industry-developed Livestock Global Assurance Program (LGAP) for the live export industry, which has been described as an evolution of the existing Exporter Supply Chain Assurance System (ESCAS).

ESCAS has not worked. So let’s give it a different name and continue to do more of the same? It’s just not good enough.

Not one live export company has faced a single prosecution or suspension under the Exporter Supply Chain Assurance System since it was set up.

What sort of a democracy are we where an industry has power over government employees, where a government continues supporting an industry that disregards its own animal welfare standards and that is no longer endorsed by the public?

Australians are going to the ballot box on 2 July. Make your vote count – for the animals, for decency, for democracy.




Banks – Where is the A in CSR?

CSR – corporate social responsibility – is a form of corporate self-regulation integrated into a business model. Traditionally, CSR has had a focus on sustainability in regard to communities and the environment.

The Australian Centre for Corporate Social Responsibility (ACCSR) offers this definition of CSR:

Social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that:

  • Contributes to sustainable development, including the health and the welfare of society
  • Takes into account the expectations of stakeholders
  • Is in compliance with applicable law and consistent with international norms of behaviour, and
  • Is integrated throughout the organization and practised in its relationships.

What does it say about the treatment of animals?

The ACCSR website notes that

Supply chain CSR issues include human rights of outsourced workers, ethical sourcing, prompt payment, use of migrant workers, doing business with oppressive regimes, treatment of animals and environmental impacts in the supply chain.


Many studies suggest that consumers are more likely to purchase from socially responsible firms or avoid purchases from socially irresponsible firms, and consumer preferences for products that are good for the environment (organic, or not tested on animals) are well documented. CSR issues for consumers include product manufacturing (e.g. human rights of workers, product safety), labelling and packaging (disclosure and completeness), marketing and advertising practices, selling practices (redress) and pricing. Australia’s tough regulatory environment does not necessarily protect corporations from rising CSR-related expectations of consumers.

In a recent article in the Harvard Business Review, John Browne, a former chief executive of BP, argues that CSR does not work. He proposes a new model, “connected leadership”. What he proposes boils down to good management and effective engagement with stakeholders. Not a radical proposition, I’d say.

Anyway, if companies engage with their stakeholders, they will find – as indicated on the ACCSR website – that an increasing number of people are concerned about the fair treatment of animals. To some, this means good animal welfare while or before the animals are used for the benefit of humans. For others, it means not using animals for our purposes because they are not ours to use; we share this planet with animals who exist for their own purposes.

How do animals feature in banks’ CSR policies?

In February, I wrote about a bank that takes a stand against experimenting on non-human primates. ING, a bank with headquarters in the Netherlands, has a policy that rules out financing the following:

  • Animal testing for cosmetic purposes
  • Sponsoring requests for events with animals where the Five Animal Freedoms are not respected
  • Animal trade involving endangered species for commercial purposes
  • Use of endangered species or non-human primates for any testing/ experimental purposes
  • Support of any type of animal fights for entertainment
  • Operating fur farms
  • The trade and manufacturing of fur products
  • The development of genetic engineering or genetic modification on plants or animals for non-medical purposes.

I checked the websites of the major Australian banks listed on the ASX to see what their CSR policies say about the treatment of animals. This is what I found:

Australia and New Zealand Banking Group Limited (ASX code: ANZ)

The ANZ’s corporate sustainability policy does not mention animals. But the ANZ Corporate Sustainability Report. Interim Report 2014 provides a case study on the live cattle export (on page 8):

A funding opportunity emerged in the first half of this financial year with a leading agriculture business connected to live cattle exports. The company breeds cattle in Australia and sells them prior to export.

Given the sensitive nature of live cattle export, ANZ worked with the customer to ensure compliance with best practice Australian standards for overseas export and animal welfare through Australian accredited live exporters and the Australian Government’s Export Supply Chain Assurance Program (ESCA).

ANZ conducted a thorough due diligence investigation to examine all animal welfare issues associated with the company’s live animal export exposure. This included a detailed assessment of their supply chain and the use and suitability of animal welfare assurance programs. Through the assessment we concluded that the company, while selling the cattle prior to export and therefore technically not undertaking live animal export itself, was taking the necessary steps to ensure that the welfare of its cattle was protected. The cattle were being sold only through three accredited exporting companies, all of which adhere to the ESCA compliance programs.

Based on the due diligence undertaken to ensure that the company was appropriately managing its supply chain risks in relation to animal welfare, ANZ agreed to provide funding. We are now working with this customer on an ongoing basis, providing advisory services to ensure their operations continue to meet the strict criteria outlined in relevant national standards.

I’d like to know which company this is and how it managed to protect the welfare of its cattle after they were sold. Animals Australia’s investigations have exposed large scale cruel treatment of exported animals. If one company was able to protect the welfare of animals in their destination countries, other companies and the public would be very interested to know how this was achieved.

The ANZ sponsors Zoos Victoria and Taronga and Western Plains Zoo.

Auswide Bank Limited (ASX code: ABA)

Auswide Bank’s corporate social responsibility policy has a focus on the community, the environment, the marketplace and the workplace. It does not mention animals.

Bank of Queensland Limited (ASX code: BOQ)

The Bank of Queensland’s sustainability policy concentrates on “customers, staff, investors and the communities we operate in”. The bank’s website provides a long list of focus areas, but animals do not feature in these. Nor does the bank’s Sustainability Scorecard allude to animals.

Bendigo and Adelaide Bank (ASX code: BEN)

The Bendigo and Adelaide Bank supports community projects to strengthen the communities their customers live in. For more than ten years the bank has had a partnership with the RSPCA to help raise funds for homeless animals. This involves RSPCA credit cards through which donations to the RSPCA can be made in various ways.

By signing up for and shopping with a RSPCA Rescue VISA Card, you are helping to fund the RSPCA’s national Adoptapet program. … So far these fantastic cards have raised over $1.5 million helping to re-home more than 200,000 animals.

Commonwealth Bank of Australia (ASX code: CBA)

Commbank has a corporate responsibility strategy. As expressed in the bank’s approach to sustainable supply chain management, Commbank expects “our people” to “Act in a socially responsible and ethical way”. However, none of these nor the supplier code of conduct include any reference to the treatment of animals.

Mystate Limited (ASX code: MYS)

The Mystate Bank is a Tasmanian financial institution. Through the MyState Foundation, it provides grants to community organisations.

“The MyState Foundation’s mission is to help educate, nurture, support and advance the interests of Tasmania’s young people.

On the bank’s website I did not find any reference to animals.

National Australia Bank Limited (ASX code: NAB)

NAB Group’s Supplier Sustainability Principles are impressive. For example, they touch on such issues as environmental management, climate change, and an inclusive and diverse workforce.

We believe that we have an important role to play in positively influencing the long-term sustainability of the planet by reducing both the direct and indirect environmental dependencies and impacts of our operations. Our environmental agenda focuses on three areas that we believe are most material to our business – efficient use of resources, understanding and minimising our dependency and impact on biodiversity and ecosystems; and addressing the issue of climate change.

In 2015, NAB provided $59.2 m in community investment (0.65% of statutory net profit before tax). Of this, the major proportion was spent on education and young people (25%) and sport (28%).

Again, I could not find any reference to animals on the NAB web pages.

Westpac Banking Corporation (ASX code: WBC)

The 2015 Westpac Group Sustainability Performance Report lists three sustainability strategies priorities: embracing societal change, environmental solutions, and better financial futures. The bank contributes in various ways to communities, such as grants and scholarships, support of social enterprises, and financial literacy education programs.

The Westpac Foundation Community Grants eligibility criteria state that “Projects that support animals or to promote animal welfare” are not eligible for community grants. This is the only reference to animals I could find on the various web pages outlining Westpac’s CSR approach. How disappointing!

However, the bank’s employees have raised funds for several animal charities.

Overall, I find it disappointing that the banks’ CSR policies do not reflect the inclusion of animals in ethical considerations. But that’s perhaps to be expected, given that very few financial institutions here in Australia consider the treatment of animals even in ethical investment products. Cruelty Free Super is a notable exception.

On the other hand, this means there is lots of room for improvement. ING has shown that it is possible.



Another German supermarket chain expands its animal welfare policies

Last month Aldi Nord released national and international animal welfare supply chain policies (in German and English language). Aldi Nord operates discount supermarkets in Germany and internationally, for example in Denmark, France, the Benelux countries, the Iberian Peninsula, and Poland. Both Aldi Nord and Aldi Süd also operate in the United States.

The Aldi supermarkets in Germany are owned by the Albrecht family, who split the business in 1966 into two separate legal entities: Aldi Süd (Aldi South) and Aldi Nord (Aldi North). Aldi Australia is owned by Aldi Süd.

I have written about Aldi Süd’s animal welfare supply chain policies previously on The Conversation and this blog. Now it’s Aldi Nord’s turn.

International Animal Welfare Purchasing Policy

ALDI Nord’s buyers are bound by this International Animal Welfare Purchasing Policy when carrying out their tendering and purchasing activities, and animal welfare matters are integrated into contracts.

The aim of the animal welfare commitment of ALDI Nord is the further development of the animal welfare standard when manufacturing our products in the defined scope of application, with the health and well-being of the animals taking top priority. We would like to raise the awareness of our customers and employees with regard to animal welfare matters through transparent information and a proactive dialogue.

The company’s commitments include, for example, the following:

  • the objective of increasing the animal welfare standard beyond the level required by law
  • to offer vegetarian and vegan substitute products as alternatives to animal products
  • certain products, such as real fur goods and angora wool, will not be sold
  • to continuously increase the proportion of animal welfare-friendly products in the product range (is this an acknowledgement that Aldi Nord sells products that are not animal welfare friendly?)
  • transparency along the supply chain and demanding the complete traceability of products, as stipulated by law. Beyond the level required by law, business partners must provide ALDI Nord with this information immediately upon request; for this purpose they must have established suitable information systems
  • simple and clear labelling of products
  • inspections and audits of business partners, including unannounced inspections of for example farms and slaughterhouses.

National Animal Welfare Purchasing Policy

The company’s national policy goes further than its international counterpart. This is most likely due to customer expectations in Germany and keeping up with competitors’ equivalent policies.

Aldi Nord has already implemented the following measures:

  • no meat and no down or feathers from force-feeding and live plucking are supplied or processed in Aldi Nord products
  • no products that involve mulesing in sheep
  • no real fur goods (the company signed the “Fur Free Declaration” in 2015)
  • no products made from angora wool, rabbit meat, quail or their eggs, lobster, eel, or shark.

Aldi Nord has a Fish Purchasing Policy for fish and seafood with a focus on sustainability throughout the entire supply chain for fish and seafood from wild-caught stocks and aquaculture. Only tuna with the “Dolphin Safe” label is sold, and no fish species that are categorised on international species protection lists as “endangered and protected” or “partially protected”.

The company uses the “V-Label” from the registered association Vegetarierbund Deutschland e.V. The label informs customers whether a product is vegetarian, without milk, without eggs or vegan.

In 2004, Aldi Nord was the first food retailing company in Germany to stop selling eggs from hens in battery cages. The company sells eggs only from barn, free-range and organic farming with certification for the alternative hen-rearing systems (KAT certification).

The company requires that all German suppliers of fresh meat are system partners in the QS inspection system (a quality assurance system). The regulations of this system go beyond legal requirements.

The recently released policy has the following, additional objectives:

  • an increase of organic products (with the assumption that organic products are associated with better animal welfare)
  • an expansion of the range of fish products that are certified as sustainable
  • expansion of the V-label products and an own brand for these products
  • a requirement that suppliers refrain from using avoidable small quantities of animal components in products
  • no use of eggs from hens reared in battery cages and small-group housing systems in 100% of the company’s processed egg products with a significant content of eggs.

In 2017, Aldi Nord will cease the sale of eggs from laying hens with trimmed beaks. From 2017, the company will not sell any pork from castrated animals and thus commit to the practice of boar fattening.

Further, Aldi Nord will formulate minimum requirements for products with animal-based raw materials, for example, in regard to husbandry, feeding, transportation, slaughtering and the use of antibiotics, and set down minimum requirements in supplier contracts.

Transparency in the supply chain

Aldi Nord commits to making its supply chains transparent and ensuring complete traceability of products. Products have a QR code and an Aldi Transparency Code (ATC); with the help of these detailed information can be obtained from the company’s website.

Our fresh chicken and turkey products are ‘5D-Ware’ (‘D’ for Germany). This guarantees that all production stages take place in Germany. The animals and their parents must hatch and grow up in Germany, be fed with feed from German feed mills and be slaughtered and processed in Germany.

We only procure fresh meat from Brazil from slaughterhouses that have joined the ‘Cattle Agreement’. We can thus rule out any association with the deforestation of the Amazon, where countless animal species live. Furthermore, social aspects such as the exclusion of forced labour, the respecting of the rights of indigenous people and the ban on land theft are taken into account.

Inspections and audits

The policy lists a range of requirements that suppliers have to follow. Also, the company – or a commissioned third party – makes unannounced on-the-spot visits on a random basis to inspect the required documentation and check compliance with all legal and industry standards as well as Aldi Nord requirements.

Such on-the-spot visits include the inspection of animal husbandry, feeding, housing (farm, slaughterhouse), transportation, stunning and other species-specific requirements.

Contribution to animal welfare

Aldi Nord commits to increasing animal welfare standards “in accordance with what is economically and scientifically feasible.” The company expects business partners to do the same. In collaboration with suppliers, the company pledges to work on animal welfare issues such as slaughtering pregnant cattle, dehorning cattle and docking pigs’ tails.

We will expand our active participation in relevant animal welfare initiatives and animal welfare networks to strengthen our commitment to animal welfare.

We will expand collaboration with suppliers to jointly achieve improvements in animal welfare, e.g. on the topic of slaughtering pregnant cattle, dehorning cattle and docking pigs’ tails.

Proactive dialogue

Aldi Nord promises to boost awareness of animal welfare among its customers and employees. It will do so by indicating its animal welfare commitment on products, its website, in retail outlets and advertising.


In Germany, the trend towards a plant-based diet is gaining in popularity resulting in increasing sales of vegetarian and vegan products. At the same time, customers interested in animal products are becoming more and more concerned about animal welfare and the sustainability of food production. The major supermarket chains in Germany have animal welfare supply chain policies and/or an increasing range of foods labelled as suitable for vegans and vegetarians (I wrote about Lidl’s position paper for the sustainable purchasing of animal products here).

Aldi Nord’s policies are available in English. Wouldn’t they make good reading material for Australia’s major supermarkets?