The methodology used in the Coller FAIRR Protein Producer Index is reviewed on an annual basis in cooperation with subject matter experts and investor members. In addition, all 60 companies in the FAIRR Protein Producer Index are invited to provide feedback throughout the review process.

The Index helps to identify the most material ESG issues currently affecting the livestock industry. It seeks to reduce the associated risks to companies and investors while encouraging a transition to a more sustainable food system.

Wherever possible, we have aligned FAIRR’s methodologies with existing methodologies and standards. This is to align with best practice and avoid increasing the reporting burden on companies. FAIRR’s methodology aligns with over 54 standards across themes and sub-sectors. These included the Sustainability Accounting Standards Board’s (SASB’s) materiality matrix for the sector. To ensure that indicators capture sector-specific issues against the most material risks, some risk factors and indicators are only applicable to individual protein sources.

FAIRR collaborated with SASB in 2019 to integrate and apply SASB metrics to the 60 companies for the Index methodology.

Under certain circumstances, FAIRR can share a more comprehensive version of the Index methodology with third parties. If you would like to request access to this, please fill out the form below and a team member will get back to you. If you are an Investor Member of FAIRR, kindly sign in to access the methodology document for download.

The methodology is an annual consultative process, and FAIRR engages with multiple stakeholders such as Index companies, investors and subject-matter experts so the Index framework continues to reflect the most material issues and best practice. We have worked with more than 60 companies, investors and issue experts since the Index was created in 2018.

The Index methodology is designed to assess how livestock and aquaculture companies manage and report on material environmental, social and governance (ESG) risks (and opportunities). We acknowledge that disclosure on its own is not entirely reflective of whether companies manage ESG risks and, if they do, whether their management systems are effective. To provide a more comprehensive view, we have started to integrate limited performance-based indicators where available and relevant: for example, on emissions performance, aquaculture feed conversion ratios and antibiotics usage.

Subject-matter experts

The FAIRR Initiative conducts company assessments using publicly available information. This includes annual and sustainability reports, company websites and (where available) CDP disclosures.

The final company rankings are based on the final Risk Factor Scores. This is a simple average of scores across the nine individual risk factors (GHG Emissions; Deforestation & Biodiversity; Water Use and Scarcity; Water Pollution; Antibiotics; Animal Welfare; Working Conditions; Food Safety; Governance). All risk factors and KPIs within an individual risk factor are weighted equally. Each KPI is made of several questions. Where relevant, companies will be awarded partial points on questions if the policies and programmes are only applicable to certain geographies or to certain proteins through the application of a quantitative weighting. The Risk Factor Score is then converted to a percentage (out of 100).

Weightings

The methodology accounts for two types of reporting scopes:

1. Geographic coverage: to fairly score a company in line with the geographic coverage of its ESG practices and disclosure, points associated with a question’s selected response option are subject to a quantitative weighting.

2. Protein breakdown: whilst some questions are protein-specific, the methodology also includes general questions where a company may not report on all animal proteins from which it derives revenue. In these cases, a second weighting is applied to reflect the protein breakdown of the company’s financials.

Risk Factor

Companies are assessed in one of the following categories:

High Risk 

No or limited disclosure and commitments.

Medium Risk

Basic management of the risk with limited detail and some disclosure of performance metrics. Basic performance targets & limited geographical application.

Low Risk 

Moderate management of the risk with more detail and moderate levels of disclosure of performance metrics. Moderate performance targets and near global application.

Best Practice

Strong management of the risk with more detail and high levels of disclosure of performance metrics. They have strong performance targets across a global application. They are also improving performance.

Opportunity Factor 

This is a separate score and captures the company’s performance on the opportunity factor of ‘alternative proteins’. 

The ten factors and 37 indicators reflect the sector’s material impacts. However, these are not an exhaustive list. A key risk for the industry is growing awareness of the causal link between high meat consumption and non-communicable diseases such as cancer, diabetes and obesity. However, the Index does not consider health and nutrition issues as part of its current risk framework, beyond an assessment of company exposure to alternative proteins. This is primarily because health and nutrition issues are complex and dependent on local culture and social contexts. There is currently no standardised framework for assessing animal protein consumption in the context of health. 

Another key risk for the industry is food waste. According to the FAO, approximately one-third of all food produced in the world is lost or wasted. The impacts and risks associated with food waste have strong relationships with other risk factors included in the Index: GHG Emissions, Water Use & Scarcity, Deforestation & Biodiversity (through land-use change), and Waste & Pollution (through fertiliser and pesticide applications). 

Similarly, food packaging and the use of plastics are emerging issues for the industry. These are linked to other risks covered by the Index. However, since these risks are not specific to the animal protein sector, the Index does not currently assess them within the risk factor framework. 

Our aim is to work with stakeholders to ensure that the framework continues to evolve with time. This will ensure it remains both comprehensive and meaningful for investors and sector companies.