The climate commitments of food giants have been put in doubt by their suppliers, according to a report backed by a group of fund managers controlling $16 trillion (€14.5 trillion) of assets under management.
Nearly 80% of major meat, fish, and dairy producers do not measure all greenhouse gas emissions and do not have meaningful targets to reduce them, which is said to undermine the pledges that High Street brands’ have made to the environment.
Suppliers to McDonald’s, Tesco, Nestlé, and Walmart ranked as the worst offenders in areas such as greenhouse gases, antibiotics and deforestation.
In the case of Walmart, suppliers such as Sanderson Farms in the US, and Cranswick in the UK, fail to report any commitments on deforestation, according to the group – yet Walmart has said it aspires to zero net deforestation in its food chain by 2020.
McDonald’s and Yum! brands have pledged to reduce antibiotics use in their beef supply chains, but the vast majority of beef suppliers do not have a policy to avoid routine use of antibiotics with the exception of one, Marfrig.
Firms such as Venky’s (India) and Hormel Foods (US) which also supply fast food giant McDonalds have made no meaningful targets to reduce greenhouse gas emissions.
“These companies urgently need to address issues such as climate risk, deforestation and antibiotic use to future-proof their own business models and to prevent the commitments of their customers, the High Street brands, from becoming nothing but fake promises,” said Jeremy Coller, founder and chief investment officer at Coller Capital.
Coller was responsible for setting up the FAIRR initiative behind this research into the food industry. It includes members such as Amundi, Legal & General Investment Management, UBS Asset Management, BMO Global Asset Management, and more.
Its index assesses 60 publicly-listed animal protein producers with a combined market cap of $324 billion.
Juan Salazar, director of responsible investment at BMO Global Asset Management, said: “Climate change is putting dire pressure on the ability of the meat, fish and dairy industries to meet global demand for protein.”
He called on meat, fish, and dairy suppliers make greener commitments.
The best performing suppliers in the index were Norwegian fish farmers Mowi, and New Zealand-based dairy cooperative Fonterra.
Four poultry firms were in the bottom five, including suppliers to McDonald’s.
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