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Protein companies failing to manage sustainability risks

More than half of the world’s largest meat and fish companies are at high risk of losing shareholder value because of their vulnerability to health, environmental and social issues.

A new Protein Producer Index by FAIRR, the $5.9tn investor network, analysed 60 global intensive farming companies on health, environmental and social issues. It found that 36 companies with a combined market capitalisation of $152bn achieved the worst grade (‘high-risk’) across all sustainability factors including use of antibiotics and greenhouse gas emissions.

Major global suppliers to McDonalds and KFC, including Chinese firm Fujian Sunner and Indian firm Venky’s, were among those classified as ‘high risk’. Sanderson Farms, the third largest poultry producer in the US, was also given a bottom-tier ranking.

Just one UK firm – meat producer Cranswick – featured in the list. It was classified as low-risk on its overall management of sustainability issues.

Antibiotics mismanagement was found to be the most poorly addressed risk. Despite increasingly urgent calls for the sector to phase out the use of medically important antibiotics, FAIRR found that 46 companies worth a combined $240bn have no policies or processes in place to eliminate the routine use of antibiotics.

Waste and pollution was rated the best managed risk factor with 43% of companies ranking as ‘low risk’ on this issue.

Other risk factors measured in the index are deforestation and biodiversity loss; water scarcity and use; animal welfare; working conditions; and food safety.

“From fast food to fine dining, much of the food on our plates leads back to the livestock and fisheries sector assessed by this index,” said Abigail Herron, global head of responsible investment at Aviva Investors, a FAIRR member organisation. “That is why it is of deep concern to investors that a majority of these global food suppliers are failing to manage such significant business risks. [….] That failure puts both global public health and their business models at risk.”