“Ethical Markets congratulates FAIRR on this important new Index which can steer investors toward healthier choices for nutrition, health and our environment, as well as alerting them to risks of over-investing in assets producing meat and other animal protein heavy diets.
We cover similar concerns and list start-up opportunities in plant-based proteins in our Green Transition Scoreboard® 2018 “Capturing CO2 While Improving Human Nutrition & Health“ now a free download at www.ethicalmarkets.com
~Hazel Henderson, Editor“
New food index sets roadmap for better health and sustainability; meat and fish companies worth $152 billion labelled ‘high risk’
New index, backed by $5.9 trillion investor network, analyses 60 global intensive farming companies on health, environmental and social issues
- 60% of meat and fish companies in the Index – 36 large companies worth $152 billion – are categorized as ‘high risk’ by research aimed at world’s largest investors.
- Major suppliers to McDonalds and KFC, including Chinese firm Fujian Sunner and Indian firm Venky’s, among those graded ‘high risk’. Sanderson Farms, third largest poultry producer in the US, also given bottom-tier ranking.
- Sector is creating a health risk by not responding to antibiotics crisis: 77% of sector (46 companies worth $239bn) rank ‘high risk’ on antibiotics stewardship, with little or no measures in place to reduce excessive use of antibiotics – despite emerging regulation on issue.
- Index also highlights global best practices in areas such as greenhouse gas emissions and alternative proteins. Norwegian firm Marine Harvest is top ranked company, with Europe-based aquaculture producers leading the sector on sustainability.
(New York, 30 May 2018). A ground-breaking new index for investors analysing a $300bn group of 60 global food companies has found that the large majority of meat, fish and dairy suppliers are failing to manage critical business risks such as greenhouse gas emissions and antibiotics risk.
The Coller FAIRR Protein Producer Index is the world’s first comprehensive assessment of how some of the world’s biggest, listed suppliers of meat and fish are managing critical sustainability risks from pollution to the Paris Agreement, food safety to worker safety. The global ranking is produced by the $5.9 trillion investor network FAIRR which has large investors such as Aviva Investors, Schroders and US fund University of California Office of the Chief Investment Officer of the Regents among its members. The Index aims to improve corporate disclosure on sustainability issues by all major livestock and fisheries companies and bridge the knowledge gap for investors on this sector.
The new Index finds:
- Shareholder value at risk: 36 companies with a combined market capitalisation of $152bn are given the worst grade (‘high-risk’) across all sustainability factors [See overall league ranking below]. These include Cal-Maine Foods (US), Guangdong Wens (China), and suppliers to large fast food chains such as Venky’s (India) and Fujian Sunner (China)
- Human health at risk: 77% of sector is failing to adequately manage or disclose antibiotic use, despite growing levels of regulation and international action to combat antibiotic resistant superbugs. Major suppliers to McDonalds and the fast food industry such as Fujian Sunner and Venky’s are among those ranked ‘high risk’ on antibiotics. One in five firms (22%) also fail to show full traceability of their food supply chain – a key part of food safety.
- Paris at risk: The livestock sector is responsible for 14.5% of global greenhouse gas emissions, roughly equivalent to the emissions of the entire US, but 72% of the sector (worth $175 billion) is failing to manage climate risk, the Index finds. The Index reveals that no major livestock company uses an internal price on carbon.
The Index also highlights corporate best practice including:
- Norwegian firm SalMar, praised for having a comprehensive target to reduce its greenhouse gas emissions by 10% by 2020.
- US meat producer Tyson Foods, which is highlighted for launching Tyson Ventures, a $150 million venture capital fund to invest in companies such as ‘Beyond Meat’ developing plant based meats and other sustainable food products and technologies.
- Norwegian aquaculture Marine Harvest – which is the top ranked company – is highlighted for its approach to antibiotics. The company tracks antibiotics usage on a gram of active substance per ton of product basis, and only uses antibiotics when fish are at risk. It aims to have “minimal” use of antibiotics by 2022.
Jeremy Coller, Founder of the FAIRR Initiative and Chief Investment Officer of Coller Capital said:
“Investors need ESG data and transparency to make better investment decisions, yet this information is lacking in the meat, fish and dairy sector. This is the first index to help investors bridge that knowledge gap.”
“As megatrends like climate change, antibiotic resistance and food technology radically reshape the way we produce and consume meat, fish and dairy, the Coller FAIRR index will help institutional capital identify both best in class companies and potential stranded assets in the food sector.”
Imogen Rose-Smith, Investment Fellow at University of California which manages over $120 billion of assets, said:
“The multi-trillion dollar global food sector is probably the world’s biggest industry, yet investors do not have the tools to understand its risks, especially the environmental and health risks hidden in big food’s labyrinth supply chains. That is why the new Coller FAIRR Protein Producer Index is a major breakthrough for investors. At a stroke it enables capital markets to more easily identify which intensive farming companies are adequately managing material business issues such as food safety, working conditions and environmental impacts, and which companies are at risk. It’s clear that the intensive farming sector must address its sustainability challenges with great urgency. On climate change alone, almost three quarters of the sector is failing to put in place the policies and processes required to respond to the issue’s serious regulatory and operational risks. That presents serious concerns for most investors.”
Abigail Herron, Global Head of Responsible Investment, Aviva Investors said:
“From fast food to fine dining, much of the food on our plates leads back to the livestock and fisheries sector assessed by this Index. That is why it is of deep concern to investors that a majority of these global food suppliers are failing to manage such significant business risks. On antibiotics alone, FAIRR’s research shows that three in four of these companies are ignoring the calls from regulators, health professionals and the financial community to manage and reduce their use of antibiotics. That failure puts both global public health and their business models at risk.”
Other findings from the new Index include:
- Chinese companies score poorly on sustainability metrics. 14 out of 16 of the China-based firms assessed (87.5%) are categorized as ‘high risk’. Norwegian aquaculture companies rank as the most sustainable, and European companies score more highly than those of the US or Asia.
- Only five of the 60 companies accounted for the emergence and growth of the ‘alternative proteins’ sector – a rapidly growing segment of the protein sector expected to reach $5.2 billion by 2020.
The Coller FAIRR Protein Producers Index is being formally launched at an event in New York on 30th May 2018.
Notes to editor
For more information or for exclusive interviews with Aarti Ramachandran Head of Research and Corporate Engagement at FAIRR or investors involved, please contact:
- Mike Weber, ESG Communications,
t: + 44 (0)7932 577755 | e: [email protected];
- A full report with all results and details of the Coller FAIRR Protein Producer Index is available on request. The overall league table of results is below.
- Methodology: All companies are given an overall ranking of ‘low’, ‘medium’ or ‘high’ risk, based on their scores against eight sustainability risk factors. These are based on stakeholder understanding of environmental, social and governance (ESG) issues and are specifically: Greenhouse gas emissions; Deforestation and biodiversity loss; Water scarcity and use; Waste and pollution; Antibiotics; Animal welfare; Working conditions and Food safety. All eight risk factors and KPIs were weighted equally and each sustainability risk factor has several KPIs underlying its scoring – these are available in the methodology appendix of the main report. All scores are based on a company’s commitments, policies and disclosure. Note, ‘Sustainable proteins’ is an additional risk factor which was assessed but not scored. All valuations are based on market capitalization figures as of March 28th 2018.
- Environmental, social and governance (ESG) factors have become a crucial part of mainstream investment with investors managing over $70 trillion of assets now signed up to the UN-supported Principles for Responsible Investment. The Coller FAIRR Index aims to ensure ESG issues associated with the animal protein sector are considered within these mainstream investment practices.