Both established and specialist startups have a new tool at their disposal when it comes to announcing the sustainability of their alternative protein products. The FAIRR investor network and the Good Food Institute (GFI) have launched two new reporting frameworks for alternative meat, seafood, dairy and egg companies to use in revealing their environmental, social and governance (ESG) impact to potential investors and others.
Investor Network FAIRR helps institutional investors define material ESG issues associated with intensive livestock and fish farming systems and incorporate this information into investment decisions.
- Think tank nonprofit GFI is a major leader in accelerating alt protein adoption and an important source of industry expertise and information.
- To develop the frameworks, the two organizations received input from 38 companies and investors, along with 14 NGOs.
- Unilever, Eat Just, Newton Investment Management, PIMCO, Blue Horizon and WWF-UK are among the companies and non-profits that have provided expertise in developing the frameworks.
How it works:
Alt protein brands that want to report on carbon emissions, land and water use, nutritional value and other ESG factors can partner with FAIRR and GFI to use the two frameworks for their business. These frameworks will provide a common language and set of standards for measuring and disclosing ESG impact.
- The specialized framework is intended for manufacturers and suppliers of ingredients primarily focused on alternative proteins. Many of the alt-meat and alt-dairy startups that have sprung up in recent years would rely on this framework.
- This framework deals with matters such as purchasing, certification, soil health and water consumption.
- Large food companies as well as retailers, manufacturers and those producing both animal and alternative proteins can access the diversified framework. This guides companies in reporting ESG data ‘related to the companies’ alternative protein portion’, including lobbying, affordability and accessibility.
- No regulatory body requires companies to report to these frameworks. However, FAIRR urges those in the alt protein space to consider this, as the frameworks “provide companies and investors with a better understanding of the ESG risks and opportunities associated with alternative proteins and can lead to best practice actions.” for companies.”
- At this time, neither FAIRR nor GFI will publish the reports submitted by companies.
Why it matters:
GFI says global meat consumption will double by 2050, and the livestock industry is already responsible for 14.5% of all anthropogenic greenhouse gas emissions. Animal farming is also strongly linked to deforestation, soil degradation from mono-cropping and zoonotic diseases such as coronaviruses.
There remains a strong debate about how effective alternative proteins – plant-based, cultivated and fermented – are in the fight against climate change. Proponents claim they deliver significant results when compared to other climate technologies such as EVs and energy. Others say that alt proteins such as plant-based meats are labor-intensive and dependent on the same monoculture systems used by animal farming, and that there are no cultivated or fermented products that mimic their animal counterparts.
One reason for this debate is that data on the impact of alt protein is still limited and what does exist is quite fragmented. FAIRR and GFI hope to develop a comprehensive set of standards that companies can use to more easily make their data public. This could affect how such companies, and alternative proteins in general, are viewed by investors and consumers.
It could also clarify how impactful alt protein is when it comes to decarbonization, and where climate technology investors should direct their capital in the future.
What they say:
Lisa Wetstone, senior director of marketing, innovation and growth strategy at the alt protein company MycoTechnology, highlighted the many ways in which ESG data can be collected and interpreted. ‘This is especially true’ the nuances of our industry,” she said. ‘We lack a common language! Laying the groundwork to standardize this information can guide us all and lift the industry as a whole.”
“We expect the members of FAIRR, who together represent $68 trillion in assets under management, to welcome the cadres as a further resource in their investment process,” added Jeremy Coller, founder and chairman of FAIRR. “We hope that both large protein producers in the Coller FAIRR Protein Producer Index and smaller specialized alternative protein companies will start using it, which will benefit the market as a whole.”