Meat, fish and dairy companies ‘failing to manage’ climate change, antibiotic risks

By Katy Askew contact

- Last updated on GMT

FAIRR sustainability index names best and worst risks for sustainable investors ©iStockweerapatkiatdumrong
FAIRR sustainability index names best and worst risks for sustainable investors ©iStockweerapatkiatdumrong
A new food index analysing the sustainability strategies of 60 global companies finds that the majority of meat, fish and dairy groups are “failing to manage” risk areas such as climate change and antibiotic resistance.

The index, compieled by investor network FAIRR, concluded that 60% of meat and fish companies examined – 36 large corporations worth $152bn – are categorised as “high risk”​ across all sustainability factors. As well as antibiotic use and GHG, the index looked at deforestation and biodiversity loss, water scarcity and use, waste and pollution, animal welfare, and working conditions and food safety.

The research aims to provide investors with a higher level of “data and transparency​” to facilitate “better investment decisions”.

“From an investment point of view, it is not only this $300bn group of companies at risk but the wider multi-trillion dollar global food supply chain which they supply. Investors need to protect shareholder value in this sector and part of that is encouraging these companies to better manage critical sustainability risks,​” Maria Lettini, Director of FAIRR, told FoodNavigator.

Lettini explained that investors are increasingly factoring in issues like sustainability. “Central to the aims of the Index is the need to improve corporate disclosure on all sustainability issues…. The main aim is to improve the overall sustainability of the sector over time. Competition will drive companies to improve and create a race to the top for sustainability in this sector. These issues are increasingly informing investment decisions - in fact the growth of FAIRR itself is a good example of this with investors managing $5.9trn of assets participating in its activities on sustainable food since it launched in 2015.”

FAIRR was founded by Jeremy Coller, who is also CIO of Coller Capital. The initiative counts 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. 

Climate change and antibiotic resistance need most progress

The areas where protein companies have the most progess to make are centred the development of climate change mitigation strategies and the spread of antibiotic resistant ‘super bugs’. FAIRR concluded.

The sector is “creating a health risk​” by not responding to antibiotics crisis, the investment network suggested. In total, 77% of the sector 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.

The index also found 72% of the sector is “failing to manage climate risk”​, despite being a significant contributor to greenhouse gas emissions. The livestock sector is responsible for 14.5% of global greenhouse gas emissions but the Index reveals that no major livestock company uses an internal price on carbon.

“To improve companies need to set in place and report on clear policies and processes for managing these issues. In the case of antibiotics, for example, Norwegian aquaculture firm Marine Harvest score well because they have a policy of 'minimal' use of antibiotics by 2022, tracks antibiotics usage on a gram of active substance per ton of product basis, and only uses antibiotics when fish are at risk,”​ Lettini observed.

Company Legal Name

Market Cap ($bn)

Country

Final Score

 

Ranking

Marine Harvest ASA

9.894

Norway

82

Low risk

Lerøy Seafood Group ASA

3.733

Norway

80

Low risk

Bakkafrost P/F

1.860

Faroe Islands

78

Low risk

Fonterra Co-operative Group Ltd

6.881

New Zealand

69

Low risk

Salmar ASA

4.726

Norway

67

Low risk

Cranswick PLC

2.120

UK

65

Low risk

Charoen Pokphand Foods PCL

6.963

Thailand

65

Low risk

Marfrig Global Foods SA

1.162

Brazil

62

Low risk

Hormel Foods Corp

17.789

USA

60

Low risk

Grieg Seafood ASA

1.035

Norway

55

Medium risk

Empresas AquaChile SA

0.580

Chile

53

Medium risk

Maple Leaf Foods Inc

2.919

Canada

53

Medium risk

Tassal Group Ltd

0.504

Australia

52

Medium risk

Grupo Nutresa SA

4.138

Colombia

50

Medium risk

Tyson Foods Inc

26.291

USA

49

Medium risk

Vietnam Dairy Products JSC

12.938

Vietnam

46

Medium risk

Scandi Standard AB

0.426

Sweden

43

Medium risk

BRF SA

6.906

Brazil

41

Medium risk

JBS S.A.

8.480

Brazil

38

High risk

China Shengmu Organic Milk Ltd

0.866

China

38

High risk

Pilgrim's Pride Corp

6.093

USA

38

High risk

WH Group Ltd

15.632

China

36

High risk

MHP SE

1.458

Ukraine

36

High risk

RCL Foods Ltd/South Africa

1.337

South Africa

35

High risk

Inner Mongolia Yili Industrial Group Co Ltd

27.029

China

32

High risk

NH Foods Ltd

4.386

Japan

31

High risk

New Hope Liuhe Co Ltd

4.865

China

30

High risk

GFPT PLC

0.534

Thailand

30

High risk

QAF Ltd

0.416

Singapore

28

High risk

China Mengniu Dairy Co Ltd

18.555

China

28

High risk

Beijing Sanyuan Foods Co Ltd

0.944

China

27

High risk

COFCO Meat Holdings Ltd

0.631

China

27

High risk

LDC SA

2.549

France

26

High risk

Inghams Group Ltd

0.993

Australia

25

High risk

Nippon Suisan Kaisha Ltd

1.611

Japan

25

High risk

Great Wall Enterprises Co Ltd

0.840

Taiwan

24

High risk

Henan Shuanghui Investment & Development Co Ltd

13.366

China

22

High risk

Sanderson Farms Inc

2.735

USA

20

High risk

Shandong Oriental Ocean Sci-Tech Co Ltd

0.910

China

20

High risk

Muyuan Foodstuff Co Ltd

8.697

China

19

High risk

QL Resources Berhad

2.104

Malaysia

19

High risk

Fujian Sunner Development Co Ltd

2.702

China

18

High risk

Guangdong Wens Foodstuffs Group Co Ltd

17.537

China

17

High risk

Prima Meat Packers Ltd

1.407

Japan

17

High risk

Japfa Ltd

0.581

Singapore

16

High risk

Almarai Co JSC

14.766

Saudi Arabia

15

High risk

Fortune Ng Fung Food Hebei Co Ltd

1.324

China

14

High risk

Chuying Agro-pastoral Group Co Ltd

1.110

China

14

High risk

China Modern Dairy Holdings Ltd

1.047

China

12

High risk

Thaifoods Group PCL

0.705

Thailand

10

High risk

Australian Agricultural Co Ltd

0.590

Australia

10

High risk

Beijing Shunxin Agriculture Co Ltd

3.622

China

10

High risk

Venky's India Ltd

0.827

India

7

High risk

Seaboard Corporation

4.467

USA

7

High risk

Cherkizovo Group PJSC

1.232

Russia

5

High risk

San Miguel Food and Beverage Inc

2.304

Philippines

5

High risk

Industrias Bachoco SAB de CV

3.118

Mexico

5

High risk

Cal-Maine Foods Inc

2.280

United States

4

High risk

Grupo Bafar SAB de CV

0.657

Mexico

3

High risk

Inti Agri Resources Tbk PT

0.532

Indonesia

0

High risk

Source: FAIRR

Related topics: Business, Dairy, Sustainability

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