Food For Thought - Meat, Dairy And Fish Firms At Risk From Failing To Tackle Climate And Antibiotics

Chickens at a Dutch farm that uses no antibiotics in their rearing. (Photo by In Pictures Ltd./Corbis via Getty Images)

The spotlight has fallen on sectors including oil and gas, minerals, electricity and automotive, illuminating how they will be disrupted by climate change and efforts to tackle it.

Now the risks to the food sector are being highlighted, in particular the meat, fish and dairy sector, whose intensive farming methods are increasingly coming under scrutiny not just for their contribution to climate change but also a raft of other issues such as overuse of antibiotics, water and fertilizer. The industry is also facing the challenge of a switch to healthier diets and an increase in the number of vegetarians and vegans.

The issues have been highlighted by a new ranking from Coller Capital. The Farm Animal Investment Risk & Return (FAIRR) Initiative’s Protein Producer Index assesses 60 of the largest livestock and aquaculture companies, with a combined market cap of close to $300 billion, on behalf of the world’s largest investors. The companies represent “most of the largest listed producers of animal proteins for human consumption … with revenues largely derived from the production and processing of intensively farmed livestock and fish. Many are suppliers to some of the world’s biggest food companies, including McDonald’s, Walmart, Nestlé and Danone,” a report on the index says.

The Coller FAIRR Protein Producer Index is the world’s first comprehensive assessment of how this sector is managing these critical sustainability risks. The goal of the Index is to help investors assess and engage with companies to ensure these risks are managed across corporate operations and supply chains. The risk factors in scope for this Index include:

• Greenhouse gas (GHG) emissions
• Deforestation & biodiversity
• Water scarcity and use
• Waste and pollution
• Antibiotics
• Animal welfare
• Working conditions
• Food safety

The Index also assesses companies on their exposure to alternative proteins, given the growing market opportunities in this space.

“With environmental, social and governance (ESG) policies having rapidly become a vital part of investors’ toolkits, it’s significant that we now have the first ever Index to look holistically at the animal protein sector through the lens of ESG issues,” says Jeremy Coller, CEO of Coller Capital and founder of the index.

The index classifies 60% of the meat and fish producers covered – 36 large companies with a combined value of $152 billion – as ‘high risk’ for investors. Three-quarters of these are based in Asia, which is poised to lead global trends in the growth of meat and dairy consumption.

“On the issue of antibiotics alone, three in four companies display inadequate polices or have no measures in place to reduce their excessive use of antibiotics – despite emerging regulation and public and investor pressure for them to do so,” the report adds. In addition, 72% of those assessed performed poorly on disclosing and managing greenhouse gas (GHG) emissions, threatening the targets of the Paris Agreement.

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https://www.forbes.com/sites/mikescott/2018/06/19/food-for-thought-meat-dairy-and-fish-firms-at-risk-from-failing-to-tackle-climate-and-antibiotics/

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