animal-welfare

Global Investor Engagement on Meat Sourcing

The FAIRR Initiative and Ceres are jointly leading a collaborative engagement with six quick-service restaurant brands. The engagement is currently supported by over 90 investors with more than $11.4 trillion in combined assets. The engagement asked the companies to de-risk their meat and dairy supply chains by taking four steps. It asked companies to undertake climate risk scenario analysis, develop strong supplier policies on climate and water, set science-based targets, and publicly report on progress against these targets.

2020 Progress Update

See the latest update on corporate progress, released on 27 January 2020.

Background

For fast-food companies buying meat and dairy, these supply chain risks present growing challenges to their supply security, sustainability ambitions, brand and reputation, and financial growth.

The fast-food sector plays a dominant role in feeding our global population. On any given day around 84.8 million adults in the US, nearly one-third of the population, consume fast food. This sector continues to expand rapidly across developed and emerging markets. A significant portion of this consumption is linked to food items that wholly or partially involve meat and/or dairy products.

Across three key areas – greenhouse gas emissions, water and land use – animal proteins have a significant environmental footprint. In August 2019, the IPCC published a special report on climate change and land arguing that the global food system both contributes to global GHG emissions and is vulnerable to climate change impacts. This increasingly creates material reputational, operational and market risks for the companies buying animal protein-based products. Agriculture and land use constitute 24% of global GHG emissions, and meat and dairy supply chains are major contributors and are also among the biggest drivers of tropical deforestation. Their productivity will also be impacted by rising temperatures.

Main contact: Faazi Adam, Research & Engagements Manager

Phase 2 Priorities

In Phase 1 (completed in 2019), investors were encouraged by companies’ responsiveness, their increasing recognition of climate and water risks in meat and dairy supply chains, and by meaningful efforts to mitigate such risks (disclosed throughout the dialogues). However, notable gaps in the sector’s risk management strategies remain, particularly around assessing supply chain resilience to various warming scenarios and setting time-bound, quantitative targets addressing supply chain emissions, water use and water pollution.

In the second phase of this collaborative engagement, investors will have the opportunity to progress the dialogues beyond a contextual discussion to more specific questions. Investors will be able to request that companies commit to key interim objectives identified during Phase I of the engagement. While these objectives differ for each company, examples include:

  • Emphasis on animal protein supply chain risks in board discussions and formalising existing board oversight

  • Development of staff capacity and expertise on sustainability

  • Formalising sustainability disclosure

  • Adding further detail to existing environmental expectations of major suppliers

  • Setting science-based climate and water targets

Related Reports

See our briefing on these issues to understand how climate and water risks affect quick-service restaurants, and why investors should engage on this issue.

Meat sourcing cover
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