Pressure on meat and dairy as biodiversity summit gets underway

The global meat and dairy sector performs “very poorly” on three biodiversity metrics expected to be part of a legally binding ‘Paris Agreement for nature’ at the UN COP15 biodiversity summit, which got underway this week.

Research by the $70 trillion-backed Fairr investor network found that at least 60% of the 47 meat, egg and dairy companies it assessed source soya for feed from areas at high risk of deforestation and have still not set deforestation targets. More than four in five (83%), including major protein players JBS and Tyson, are not adequately managing the pollution of waterways from manure. Some 87% do not assess if their farms are located in water-stressed areas.

The data comes from the release of the fifth annual Coller Fairr protein producer index, which assesses 60 publicly-listed animal protein producers – worth a combined $360 billion (£296 billion) and spanning meat, dairy, eggs and aquaculture – against 10 environmental, social and governance-related factors. 

The direction of travel is largely positive – many of the headline figures are “encouraging”, said Fairr. Indeed, the proportion of companies with a ‘high risk’ rating has fallen to a record low of 56% – down from 72% in 2019. However, the fact that more than half the companies are still classified as high risk is “alarming”. 

Water scarcity and pollution were the worst performing factors in 2019’s index, and this year scores fell further. Aquaculture companies performed particular poorly on these factors. However, they have managed to provide better data on emissions factors for feed inputs than their counterparts in other protein categories. 

The report shows that more than three quarters of protein producers are still poorly prepared to meet the demands of a 1.5°C-aligned pathway. This leaves them “increasingly vulnerable” to climate-related financial risks. 

The intrinsic link between deforestation and climate change is now fully recognised in the guidance recently produced for businesses in the forest, land and agriculture (FLAG) sector by the Science-based targets initiative (SBTi). However, only 8% of all assessed companies achieved a ‘best practice’ score for their deforestation risk management for soya, according to Fairr. Just 14% managed to do so for cattle sourcing.

Fairr said most companies do not have full visibility of their soya and cattle supply. “This casts doubt on the validity and substance of any commitments to source soya and beef sustainably, since companies cannot track overall progress and supplier compliance with their commitments.” Six of McDonald’s 10 major suppliers (present and past) have no deforestation commitments, for example.

“The opaqueness of the information provided in many cases means food retailers and manufacturers might not be able to meet their own deforestation-free targets,” Fairr warned. “[Our] research also shows the latter often do not disclose their lists of suppliers, making it hard for investors and ESG data providers to cross-check the validity of their statements.” 

“From rainforests to rivers, meat and dairy producers are failing to manage their biodiversity impacts,” said network chair Jeremy Coller. Industrial animal agriculture is the “number one” cause of deforestation and the “number one” user of fresh water globally.

Coller added: “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.  [But] change is possible [and] the industry appears open to it.”

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