Investors have launched two frameworks to help alternative food companies such as plant-based meats and milk alternatives report their impact.
The $68trn investor network Fairr and the Good Food Institute (GFI) have designed the Alternative Proteins ESG Reporting Framework for Specialized Companies and the Alternative Proteins ESG Reporting Framework for Diversified Companies with input from more than 50 investors, companies and NGOs including Newton Investment Management, Pimco and the WWF-UK.
They hope companies will use the frameworks to report on ESG factors such as carbon emissions, land, water and nutrition impacts, and that they will encouragement investment in these areas.
“As the old adage goes, you cannot manage what you cannot measure – these frameworks provide investors and companies with a common language and set of standards to measure and disclose how they are managing their ESG impacts and addressing climate goals,” said Jeremy Coller, chair of Fairr.
“We hope to see both large protein producers in the Coller Fairr Protein Producer Index and smaller specialised alternative protein companies adopt it, which will benefit the market as a whole.”
Rosie Wardle, partner at Synthesis Capital, welcomed the frameworks for bringing consistency and measurement to the industry.
“As alternative protein start-ups grow and mature, and eventually become the food industry giants of tomorrow, using this new specialised framework will help to ensure that they are ready for the ESG disclosures that are now demanded of all large companies across private and public markets,” she said.
“We will be integrating the framework into our existing ESG policies and processes to help us further understand company performance in a more detailed way and monitor impact over time.”
Jared Fernandez, senior ESG analyst and proxy voting manager at investor Boston Trust Walden, added: “The GFI/Fairr reporting frameworks give investors the information necessary to assess and value companies and their supply chains in the transition to a low-carbon economy.”
Chance to decarbonise
Investment in alternative proteins, which are expected to help decarbonise food industries, increased by an average five-year growth rate of 91% through 2021 according to GFI analysis of PitchBook data. Sales are estimated to rise by up to $1.1trn by 2040 and represent up to 60% of the total meat market.
By comparison, meat, dairy and egg production accounts for 77% of agricultural land use, nearly 14.5% of global GHG emissions, causes more deforestation and uses more antibiotics than any other industry.
Sharyn Murray, GFI investor engagement manager, said: “Alternative proteins offer meaningfully lower greenhouse gas emissions as compared to conventional animal protein, as well as considerable food safety and nutritional advantages.
“As the alternative protein industry continues to partner with the private sector to build responsible and sustainable businesses of the future, these frameworks will enable companies to claim their natural leadership role on ESG. This will lift up and guide all alternative protein companies toward best practices and the use of one common language to reveal the huge planetary rewards the industry offers.”