The world’s 60 largest food companies reduced their risks from biodiversity and deforestation by 6% over the last year, a report by investor network FAIRR has found.

However, more than half of are still at ‘high risk’ from biodiversity and deforestation, the report said.

The non-profit assessed 60 of the largest listed global meat, dairy, and aquaculture companies across 10 environmental, social, and governance factors for its Coller FAIRR Protein Producer Index 2023/24.

Key performance indicators assessed for the biodiversity and deforestation factor included ecosystem impacts, deforestation-free targets for cattle, and feed innovation.

The best-performing companies improved their risk scores in the category by 9%, while the worst-performers received grades 3% lower than the previous year, FAIRR said.

The firms made overall progress across all 10 ESG factors of 5%, with some of the greatest improvements seen in alternative proteins, waste and pollution, and water use compared with previous results.

Antibiotics was the only factor score to worsen across companies on average, down by 1% since the previous year.

FAIRR index companies ranked by factor: 

EMISSIONS INCREASING

Despite ESG score improvements across 60 companies, in a zoomed-in assessment of 20 of the largest firms by value absolute disclosed greenhouse gas emissions rose by 3% between 2022 and 2023, FAIRR said.

The result from the group of 20, which includes McDonald’s and Walmart, was “extremely disappointing”, Jeremy Coller, chair of FAIRR and chief investment officer at London-headquartered Coller Capital, said.

“Those responsible aren’t just rogue outliers … Investors should think long and hard about what this means for the risk profile of their portfolios,” Coller said in the report.

However, four of the firms have set net-zero targets approved by Science-Based Targets initiative (SBTi), while eight companies including Tyson Foods have reported on their Scope 3 supply chain emissions.

Indeed, Tyson and Danone saw their disclosed emissions fall, but their progress was cancelled out by emissions increases from other companies, according to FAIRR.

FOREST, LAND, AND AGRICUTLURE

SBTi introduced a method for companies in land-intensive sectors to set targets for land-based emissions reductions in Sep. 2022 called Forest, Land, and Agriculture Guidance (FLAG).

FLAG included criteria such as setting a zero-deforestation target for at least 2025.

French company Danone was “unique” in being the only one out of 60 companies in the FAIRR index to disclose a FLAG target, the non-profit said.

Danone has targeted reducing its absolute Scope 1 and Scope 3 FLAG greenhouse gas emissions by 30% by 2030, from a 2020 baseline, according to FAIRR.

“Another 17 companies are expected to set them in the next two years … It remains to be seen, though, whether companies will be able to keep pace with SBTi deadlines,” it said.

By Thomas Cox – t.cox@carbon-pulse.com

*** Click here to sign up to our twice-weekly biodiversity newsletter ***