Report: Food giants ‘sourcing from suppliers flouting climate commitments’
Companies supplying meat and dairy to some of the world's biggest food firms, including Nestle, McDonalds and Walmart, are failing to act in line with their key clients' environmental ambitions.
That is the key conclusion of the FAIRR’s updated Protein Producer Index, which maps the sustainability initiatives of 60 of the largest publicly listed animal protein producers globally. This group of suppliers represents a global market capacity of $324bn, according to FAIRR.
Taking into account metrics across the fields of greenhouse gas (GHG) emissions, deforestation, water stewardship, antibiotic use, animal welfare, worker safety and investment in plant-based proteins, the Index gives each supplier an overall ranking of “high-risk”, “medium-risk”, “low-risk” or “best practice”.
None of the companies assessed achieved “best practice status” – but 39 were classed as high-risk and a further 16 as medium-risk.
Firms classed as high-risk included Venky’s – and India-based poultry firm supplying the likes of McDonald’s – and US poultry giant Cal-Maine Foods, whose clients include Walmart. FAIRR noted that neither of these firms reports on GHG emissions or have set GHG emissions reduction targets, even though Walmart and McDonald’s are both working towards science-based targets.
In the medium-risk category, meanwhile, are firms including Homel and Cranswick. FAIRR states that Cranswick has not reported any public commitments on deforestation, despite client Walmart aspiring towards a net-zero-deforestation supply chain by 2020. Also classed as medium-risk is French poultry, dairy and ready-meal supplier LDC, which supplies products to Nestle.
FAIRR founder Jeremy Coller said that the lack of environmental action from food suppliers was undermining the “bold commitments made on sustainability in recent years” by high-street food brands.
“As last month’s landmark report from the Intergovernmental Panel on Climate Change (IPCC) demonstrated, the world’s meat, fish and dairy industries are under serious threat from climate change impacts,” Coller said.
“The weight of evidence highlighted by the Coller FAIRR Index has left investors concerned that the sector is failing to act.
“These companies urgently need to address issues such as climate risk, deforestation and antibiotic use to future proof their own business models and to prevent the commitments of their customers, the high-street brands, from becoming nothing but fake promises.”
Responding to the FAIRR Index, a Homel spokesperson told edie that the business is due to enter into a virtual power purchase agreement (VPPA) in the near future to source around half of its electricity from wind, as it strives to reduce its Scope 1 (direct) and Scope 2 (power-related) emissions by 10% by 2020.
“We have reviewed the report and its analysis; we are pleased to see the report highlighted our company as one of the leaders in the industry and showcased Hormel Foods for our best practices for water usage, commenting that we are the only company out of 16 that has assessed water discharge risk and committed to meeting or exceeding the required water discharge quality,” the spokesperson said.
“Additionally, the report singled out Hormel Foods as being the only company that has established a sustainable agricultural policy that extends to feed grain growers. As part of our ongoing Food Journey, we will continue to investigate and employ leading practices in our sustainability efforts.”
edie has contacted the other suppliers named above for their response to FAIRR’s research.
Coller’s call to action comes after a coalition of investment firms with more than $6.5trn in assets under management urged fast food companies to take more ambitious action to tackle the climate and water risks within their supply chains, as a “matter of urgency”.
Specifically, these investors were concerned about the exposure of meat and dairy suppliers to climate-related risks such as water stress, sea-level rise and extreme weather events.
Indeed, FAIRR’s own research has found that carbon emissions from the agriculture sector could eat up 70% of the global carbon budget by 2050 – the date by which the global population is forecast to surpass 10 billion for the first time.
This increase in emissions alone, aside from growth predicted in other sectors, will create an 11-gigaton GHG mitigation gap between reality and the target level required to limit the global temperature increase to 2C, the research concludes.
As for water, FAIRR claims that agriculture will use around 10% of global water flows by 2050, exacerbating existing water stewardship challenges.
In light of these trends, coupled with concerns around large-scale deforestation, fires, and human and animal rights abuses, many businesses are beginning to increase their investment in plant-based proteins. One-quarter of the firms listed in FAIRR’s new index now have investments in vegetarian or vegan alternatives, including transitional meat firm Tyson Foods. Globally the alternative protein market is now predicted to surpass $100bn in the next 15 years, with moves from suppliers compounded by consumer-facing brands such as Gregg’s, Marks & Spencer (M&S) and KFC.