The latest climate science is crystal clear. We have a rapidly closing window to slow global warming or face catastrophic consequences. Companies around the world, across many sectors, are responding to the challenge by setting science-based targets (SBTs) ie ambitious emission reduction objectives that align with what climate scientists say is required to reach the Paris Agreement goals.
Yet in the animal agriculture sector, responsible for 14.5% of net global greenhouse gas emissions, SBTs remain the exception, not the rule. Of the 4,400 companies now committed to science-based targets, only 80 are in the food production sector.
Findings from the latest Coller Fairr Protein Producer Index, which analyses the ESG performance of 60 of the largest meat, fish and dairy companies, finds that only 17% of these leading players in the industry have set SBTs.
Although it is encouraging this number has risen from just 2% in 2019, it remains a source of concern to investors that 50 animal agriculture giants have still not set SBTs, leaving them vulnerable to looming transition risks. As climate-related regulatory pressure grows, companies in the sector are facing mounting financial and regulatory risks when it comes to emissions reductions – risks that investors are finding harder and harder to swallow.
The urgency of the climate agenda also means laggards will find it challenging to catch up as more companies are providing rigorous SBTs at record pace.
In October 2021, the Science Based Targets Initiative (SBTi) launched the net-zero standard, raising the bar on emissions best practice and increasing the demand on companies to align their operations with a 1.5C pathway. Currently, none of the protein producers assessed in Fairr’s Index have set SBTi-aligned net-zero targets, although seven companies have committed to setting one.