Climate Transition Proteins: Flavour of the Future

Sustainable Proteins Engagement: Phase 6

Executive Summary

Executive Summary

FAIRR’s engagement with 23 of the largest global food manufacturers and retailers has acted as a catalyst to lead companies to take action on a challenging topic not previously considered a corporate sustainability priority. Today, portfolio diversification is recognised as a material business issue. The aim is for industry peers to align with best practices and foster a sustainable, nutritious, and just global food system transition. FAIRR found evidence of companies implementing portfolio diversification initiatives.

The number of companies setting targets continues to increase. In 2022, 35% of the engagement companies have committed to increasing the volume or sales of meat and/or dairy alternatives. This figure is up from 28% in 2021 and 0% in 2019. Companies are increasingly investing in building internal capabilities and systems to track data; more are disclosing metrics. 39% of companies reported at least one metric showcasing the shift of their product portfolio, up from 32% in 2021 and 0% in 2019.

Only 5 out of the 16 companies that have net-zero targets, cover Scope 3 emissions and have set a portfolio diversification target. This is an issue as on average, animal agriculture accounts for around 33% of total GHG emissions for engagement companies. Most companies are missing the opportunity to mitigate negative environmental impacts in their supply chain by not exploiting the connection between protein diversification and climate mitigation.

48% of companies have a neutral outlook, meaning they are on track to maintain rather than accelerate improvement. Nevertheless, 35% of engagement companies have a positive outlook, as there is evidence that these achieved considerable progress and will continue with an upwards trajectory in the next 12-18 months.

All companies in the engagement are investing in developing plant-based products – deemed one of the fastest-growing categories. Examples hint at fermented-enabled protein becoming the next preferred technology; engagement companies collaborate directly with food tech start-ups to incorporate novel technologies into their portfolios.

There is still substantial diversity in the nutritional content. Nutrition integration into alternative protein portfolios has progressed, but efforts within this area have been inconsistent, resulting in variable nutritional profiles.

Consumer engagement continues to be the lowest-performing area for companies in this engagement, given the lack of an overarching strategy to accelerate consumer uptake. Nevertheless, once seen as a premium-priced indulgence, engagement companies are now making concerted efforts to increase alternative proteins’ accessibility and affordability.

FAIRR conducted research and analysis on the alternative proteins sector to provide investors with a market update, summarising relevant developments in the last year. Moreover, FAIRR found policymakers need to step up their game to support the food system transition. Regulatory changes supporting a 1.5-degree warming trajectory will also play a key role in further developing the sector. Regulatory approval for novel foods and sizable public investments are needed to de-risk food technologies.

Sustainable proteins have a significant abatement potential, as they lessen animal agriculture exposure and incorporate sustainability improvements in animal-derived proteins. Current data does not support that animal farming practices with a lower impact, such as regenerative agriculture, alone would provide the mitigation needed for a 1.5-degree trajectory. Moreover, animal agriculture has broader environmental and social impacts.

To find out more on this topic, visit FAIRR’s Sustainable Protein Hub.

Contact Sofia de la Parra or Emma Berntman

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