Coller FAIRR Protein Producer Index finds 3% absolute carbon emissions increase over past 12 months.
Meat and dairy giants are “going backwards” on reducing carbon emissions, Jeremy Coller, Chair and Founder of the FAIRR network has warned.
His comments follow the release of the sixth annual Coller FAIRR Protein Producer Index, which assesses a total of 60 publicly-listed animal protein producers worth a combined US$364 billion against ten ESG-related factors.
Coller said the index this year showed “progress across the board” with a fall in the number of companies rated as “high risk” and the scope of emissions reporting continuing to improve amongst the bigger firms.
But he also warned that “it’s a really big bump” with the industry facing “a long way to go to make a meaningful impact on the race to net zero”.
He continued: “For all the warm words, and all the promises, and all the good intentions, when it comes to greenhouse gases (GHGs), many protein producers are actually going backwards.”
Among the 20 largest meat and dairy firms, the past 12 months has seen an increase of almost 3% in absolute emissions, he said.
“This is an investment risk and it underlines the urgent need for a food and agriculture roadmap so we have a level playing field for investors like we have for fossil fuels.
“The intensive agriculture industry is responsible for more GHG emissions than every car, aeroplane, train, truck and ship combined – the whole transport sector. We can’t tackle climate change without fixing the way we feed our planet.”
At last year’s COP27, the UN Food and Agriculture Organization agreed to produce a 1.5°C roadmap for agri-food systems in time for COP28 following a call led by FAIRR, backed by investors with US$18 trillion, as well as Christiana Figueres, Ban Ki-moon and Mary Robinson.
Some other key findings from this year’s FAIRR Index were that in total four of the 20 firms have set net zero targets approved by the Science-Based Targets initiative (SBTi). On disclosure, 40% (eight firms) now publicly report Scope 3 emissions, with US-operating Tyson Foods and WH Group disclosing all scopes for the first time this year.
Human capital risk “prevalent”
The index launch was accompanied by a report outlining progress on four topics “top of mind” for the meat and dairy industry: human capital risk, antibiotics & animal welfare and incorporating circularity in resource management.
On human capital risks, Thalia Vounaki, Senior Manager, Research & Engagements FAIRR Initiative, said it continued to be “prevalent” in the industry, demonstrated by recent child labour scandals in the US and the continuous labour shortages facing the sector. Vounaki said these risks were material to investors in two ways.
“Firstly, labour shortages can lead to disruption of operations and food supply chains globally, hitting profitability of companies, and secondly through reputational damage of companies.”
She said some mitigation measures that companies could use to secure a more stable workforce included supporting freedom of association or committing to paying fair wages.
On antimicrobial resistance, research found that 38% of index companies had no antibiotic policy in place that specified for what purpose antibiotic can or cannot be used, and that covers what type of antibiotics are acceptable to use.
High usage of antibiotics was associated with poor animal welfare, she added. “As reducing antibiotic use hinges on companies taking animal welfare measures seriously, it is alarming that only half of companies discuss biosecurity and animal hygiene as a means to reduce antibiotic usage.
“This highlights an important group of companies do not recognise the link between the two.”
On circular resource management, half (53%) of the meat and dairy companies in the index (51/60) reported that they treat manure or effluent from the processing facilities to produce fertiliser which in the case of manure is often applied on fields within 5km, while just a third of those companies take additional circular measures.