Meat and dairy giants’ emissions continue to rise despite pledges, according to US$70T investor network

08 Nov 2023 --- Greenhouse gas (GHG) emissions from the meat and dairy sector are still rising year-on-year, with levels increasing by 3.28% from the top 20 producers that reported their emissions, of which 40% still do not include Scope 3 (indirect) emissions as established by the Science-based Targets Initiative (SBTi), according to new analysis.

The analysis is part of a recently released report, The FAIRR Protein Producer Index, by the US$70 trillion-backed FAIRR Investor network, which analyses ESG risks in the F&B market. 

The index assesses 60 publicly-listed animal protein producers worth a combined US$364 billion (as of March 2023) against ten environmental, social and governance (ESG)-related factors. 

Some 20 firms saw disclosed emissions fall this year, including Tyson Foods and Danone, but rises from other meat and dairy giants negated industry progress. The analysis also shows varying levels of climate commitments and disclosure. In total, four of the 20 firms have set net-zero targets approved by the SBTi.

Calls for greater transparency
The report comes days ahead of COP28 in Dubai (November 30–December 12). The group of top producers includes firms like Hormel Foods and New Hope Liuhe, suppliers and household names like Walmart and McDonald’s. 

Livestock is estimated to be responsible for around 14.5% of GHG emissions, according to the report.Thalia Vounaki, senior manager for research and engagements at FAIRR Initiative, tells Food Ingredients First that “until we have full transparency in the sector, predicting emission numbers remains challenging.”

“Companies are disclosing Scope 3 emissions, and more are setting targets. However, few companies with a complete inventory disclose absolute reduction emissions.”

“While emissions from protein producers are rising, the increased commitment we have seen to disclosing emissions, particularly in Scope 3, is a positive indicator. By acknowledging and addressing these emissions, companies set the stage for implementing effective mitigation strategies.”

“Stakeholders downstream the value chain such as quick service restaurants and supermarkets should use the findings as an engagement tool with their suppliers. For example, to understand where the gaps are in emissions and deforestation commitment along their value chain.” 

Livestock growth and investments 
Livestock is estimated to be responsible for around 14.5% of GHG emissions, according to the report. Food system emissions represent an estimated third of GHG emissions and 40% of methane emissions. 

Jeremy Coller, chair and founder of the FAIRR network, says that more accurate reporting under SBTi standards, including Scope 3 emissions, is necessary for F&B corporations to show their commitment to climate pledges. 

“What you can measure, you can manage, so investors will welcome the increased disclosure of Scope 3 emissions by the meat and dairy sector.” 

The more accurate the reporting, the more confident the FAIRR investors will be to engage with companies, he asserts. 

Supermarkets and restaurants should use the findings as an engagement tool for their suppliers, says Vounaki.For example, Oshni Arachchi, head of Active Ownership at Danske Bank, responded to the report’s findings, saying: “We welcome increasing transparency in the sector, but with time running out to meet the goals of the Paris Agreement, we also need to see sector-wide action.”

“The agriculture sector is not only essential for food production. It uses around half of the world’s habitable land and, if not carefully managed, can drive deforestation, biodiversity loss and GHG emissions.” 

“A significant portion of those emissions and the majority of deforestation globally comes from the meat and dairy sector, and FAIRR’s research underlines the urgency with which the livestock producers should act to transition to more sustainable production.”

Vounaki says that while it’s encouraging to see more firms disclosing Scope 3 emissions, “there is a long way to go, with 60% of the 20 largest meat and dairy firms still not disclosing Scope 3 and three producers offering no emissions disclosure at all.” 

“Investors must continue to engage with the sector with a clear message that to manage climate risk they need comprehensive disclosures which include supply chain emissions and full inventories that split which emissions come from feed and which come from animals.”

Corporate infiltration at COP28? 
With the COP28 climate summit nearing, the findings also raise questions over how meat and dairy giants can actively influence global policymaking through sponsorship deals. In June, the UN Framework Convention on Climate Change set requirements for all COP28 delegates to disclose their affiliations publicly. 

Additionally, 133 US and European elected officials co-signed a letter urging the removal of Sultan Al Jaber as COP28 president. Al Jaber is the head of the Abu Dhabi National Oil Company, which recently announced a plan to expand its oil and gas production significantly.

Last year, environmentalists raised over 235,000 signatures in an online petition to prevent “corporate infiltration” of COP27, as Coca-Cola was made an official sponsor. 

Vounaki says that to ensure the industry remains on track to meet the Paris Climate Goals, a roadmap to 2050 is needed — similar to the International Energy Agency’s roadmap, published in May 2021. 

“FAIRR-led calls for the UN FAO to create such a roadmap, and this report is expected to be released during COP28,” she says. 

By Louis Gore-Langton