Investor-backed initiatives debut standardised ESG reporting guidelines for plant-based meats and alternative protein sector
The fast-expanding alternative protein industry has been provided with a new set of investor-approved reporting guidelines to help companies better demonstrate how plant-based products deliver significant environmental benefits.
The investor-backed FAIRR Initiative and Good Food Institute (GFI) non-profit last week launched two new environmental, social, and governance (ESG) reporting frameworks designed specifically for producers and retailers of plant-based meats and alternative proteins.
The two groups said the guidelines had been developed with in-put from a wide range of investors, NGOs, and businesses, including leading players in the alternative proteins movement, such as Unilever, EAT Just Inc., Newton Investment Management, PIMCO, Blue Horizon and the WWF-UK.
Numerous studies have shown that alternative protein products can deliver huge environmental savings in terms of carbon emissions, water and energy use, and air pollution and soil impacts compared to conventional agricultural products. But to date there has been no standardised approach for measuring environmental performance across the fast-growing sector.
As such, the new open source Alternative Proteins ESG Reporting Framework for Specialized Companies and the Alternative Proteins ESG Reporting Framework for Diversified Companies aims to provide investors, governments, and consumers with a route to receiving accurate information from each alternative protein business.
Sharyn Murray, GFI investor engagement manager, said the new guidelines would help "alternative protein companies showcase the many ESG advantages of their current business models".
"Alternative proteins offer meaningfully lower greenhouse gas emissions as compared to conventional animal protein as well as considerable food safety and nutritional advantages," she said. "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."
Her comments were echoed by Jeremy Coller, chair and founder of FAIRR, and chief investment officer at Coller Capital. "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," he said. "We expect that FAIRR's members, representing $68tr assets under management will welcome the frameworks as a further tool in their investment process. 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."
The new Specialized Framework has been designed for manufacturers and ingredient suppliers whose core focus is alternative proteins, such as meat, dairy or whey protein, or gelatin. Meanwhile, the Diversified Framework has been designed for incumbent food companies, retailers, manufacturers, and animal protein producers with product portfolios that include both conventional and alternative proteins.
The new guidelines come as the alternative protein sector continues to enjoy rapid growth. According to GFI, investment in alternative proteins has increased by an average five-year growth rate of 91 per cent through to 2021, while sales are estimated to rise by up to $1.1tr by 2040 and devour up to 60 per cent of the total meat market.
Rosie Wardle, co-founder and partner at Synthesis Capital, said the new guidelines would help alternative protein providers get ahead of growing demands for more robust ESG reporting. "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 welcome new tools in the market such as this framework, which brings much-needed structure and consistency to measuring sustainability impacts. 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."