Report: Meat and dairy majors still failing to tackle deforestation, pollution and water risks
An analysis of 47 large meat, seafood. egg and dairy suppliers has revealed that 87% are failing to measure water stress and 60% are still sourcing soy for animal feed from areas classed as having a high deforestation rate.
The analysis has been published today (6 December) by the FAIRR Initiative, which convenes investors managing $70trn of assets in a collective drive for engagement with the protein sector on environmental, social and governance (ESG) issues.
To coincide with the UN’s 15th convention of the parties on biodiversity in Montreal, which begins this week, FAIRR is using this edition of its annual analysis to highlight how many of the companies listed are extremely poorly prepared to align with the new treaty on biodiversity conservation and restoration which will result from the meeting.
“Investors are focused on material financial risks for companies, and a global agreement on nature at COP15 would see the intensive animal agriculture industry face increased regulatory, legal, tax and reputational risks,” FAIRR Initiative chair Jeremy Coller explained.
He added: “With the Food and Agriculture Organization of the United Nations making a significant announcement at COP27, committing to develop an agricultural roadmap to 1.5C by COP28, we can be confident this trend will continue to gain momentum as companies adapt to the inevitable transition to a more sustainable food system.”
One of the facets of the UN biodiversity treaty will involve the protection of freshwater ecosystems. FAIRR has stated that 87% of the companies included in its analysis either do not know, or do not disclose, whether the farms in their operations and supply chains are located in water-stressed areas. This leaves them unable to develop and deliver appropriate water stewardship plans.
UN negotiators will also agree on measures to reduce pollution, including nutrient pollution in agriculture. On the negotiating table is a proposal to at least halve the amount of nutrients including nitrogen lost by 2030.
FAIRR’s analysis found that 83% of the companies assessed have no requirements for suppliers to manage nutrient pollution from entering waterways. Companies which ranked poorly here included large multinational meat firms JBS and Tyson, whose clients include hundreds of restaurant chains and foodservice firms. Moreover, 70% of the companies assessed are deemed by FAIRR as posing a risk to the environment through antibiotic waste.
Additionally, FAIRR’s index highlights how many large companies are not meeting investor expectations when it comes to tackling deforestation in supply chains. Six in ten of the businesses included in the index source soy for feed from areas at high risk of deforestation and have not set time-bound, numerical targets to end deforestation. Companies included in this cohort include Chinese multinationals New Hope and Fujian Summer, which rank in the bottom ten companies overall and are deemed high-risk across several metrics.
Almost 80% of the soy produced globally goes towards making animal feed. Less than 10% is consumed directly by people in products such as tofu or soy sauce.
FAIRR notes that disclosures have been particularly weak from Chinese firms and those headquartered elsewhere in Asia, including Vietnamese firms. It would like to see governments across the continent bringing forward regulation on disclosures to help change this trend.
FAIRR also wants to see more large businesses in the sector moving ahead of legislation and regulation.Only four companies included in the analysis are classed as ‘low risk’ overall. Three are from Norway – Mowi ASA, Grieg Seafood ASA and Leroy Seafood Group ASA. The fourth is Brazilian multinational Marfrig Global Foods. British Cranswick Plc takes fifth place in the table.
In related news, Irish firm Dawn Meats, which was not included in the FAIRR analysis, has set a 2040 net-zero target for its operations and pledged to achieve a net-zero supply chain “as soon as possible” thereafter. It is planning to develop a verified, 1.5C-aligned target for Scope 3 (indirect) emissions.
The business has confirmed an initial £90m investment package to help support the delivery of the target, building on a 40% year-on-year reduction in operational emissions for the year ending 2023.
This money will be funnelled into proframmes relating to low-carbon plant infrastructure, low-impact refrigeration, cleaner transport and thermal energy generation.
Dawn Meats and Dunbia’s group sustainability director Gill Higgins said that increasing climate targets to ensure they are ambitious is “necessary to face the enormous challenge in front of us”.
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