In view of new research and ongoing developments in the sector, we are now in the process of designing the Coller FAIRR Climate Risk Tool 3.0. The current Tool, which launched in July 2020, was designed as a first step in modelling the impact of climate change on the animal protein industry. The new version, however. will incorporate IPCC assessment scenarios and more explicit impacts, such as those relating to water and deforestation risks. It will also modify existing parameters on the growth trajectory of alternative proteins.
These changes are important because climate change is a dynamic area of work. Any science-based tool built to address this sector must evolve with time and greater understanding of the biophysical and socio-economic factors. The IPCC released its mitigation report this year, with climate scenarios/narratives—called Socio-Economic Pathways—being integral to this assessment. The new version of the Tool will be the first in the market to model parameters based on socio-economic pathways.
Our new Biodiversity workstream aims to consolidate current research on biodiversity-related risks while opening avenues to engage with protein producers on three major pathways to biodiversity loss. These pathways include:
- Land-use change for grazing and feed production
- Land management and issues relating to intensive grazing and monoculture
- Waste and pollution from intensive farming facilities and slaughterhouses
In conjunction with our work on climate risk, water scarcity and sustainable proteins, these issues will form the basis of our work on natural capital. We will, of course, continue to expand our data offerings throughout the coming year, with a report on biodiversity-related risks expected this Summer.
To address a gap in the market and build upon our research into the animal pharmaceuticals industry, we are launching an engagement focused on antimicrobial resistance (AMR). This will address the overuse and misuse of antimicrobials in the food sector.
Over 70% of antimicrobials are used in animal agriculture, often for unnecessary purposes, such as growth promotion and prophylaxis. This is driving the silent pandemic’ of AMR.
The engagement will target seven of the world’s largest publicly listed animal pharmaceutical companies (i.e., those that manufacture, market and sell these drugs) and encourage them to implement stronger policies and practices to mitigate the risk of AMR in their supply chains and highlight potential opportunities.
The Coller FAIRR Consumer Protein Index represents one of our most significant projects in FY2022-23 and will take shape towards the end of the fiscal year.
Covering retailers, brand manufacturers, quick-service restaurants, food service providers and ingredient companies, this new benchmark will create a standardised approach for assessing consumer protein companies through an ESG-lens. It will also show how some of the most prominent international brands perform against their peers.
This year, our team will develop the framework in collaboration with investors, companies and stakeholders before testing the framework by evaluating ten companies against it.
The FAIRR Initiative recognises the need for a Just Transition towards a more sustainable food system and will be releasing a report examining this in 2022. We aim to ensure that the steps required to reach net-zero by 2050 are undertaken in an inclusive and just way, consulting stakeholders at all levels. Currently, the agricultural sector falls short of other sectors, such as the energy sector, in its efforts to reduce emissions and implement the Just Transition principles.
Investors highlight the importance of repurposing agricultural subsidies to align with climate and biodiversity goals. From a policy perspective, we need to see a considerable restructuring of public and private support. Of the $540 billion given to farmers every year in global subsidies, 90% is “harmful” to the planet. Subsidies given to farmers (e.g., via the EU’s Common Agricultural Policy (CAP)) disincentivise them from implementing the critical changes needed to make food systems more resilient and sustainable. Investors are becoming increasingly interested in these discussions as evidenced by a recent investor statement calling for a greener CAP.
In 2022, the FAIRR Initiative and the Good Food Institute will work together to produce two ESG-impact measurement frameworks for the alternative proteins industry. The first will be created for large established food retailers, manufacturers and animal protein producers. The second will be created for pure-play alternative protein companies and start-ups.
Creating these frameworks will establish common metrics with which companies and investors can measure, track and report against ESG credentials. It will also provide a standardised set of questions for companies, as well as indicators that capture ESG issues specific to the alternative proteins market. Furthermore, it will allow for greater transparency on ESG impacts, revealing the most material risks and opportunities in the alternative proteins industry.