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