The FAIRR Initiative investor network and GFI have created new reporting frameworks for alternative-protein businesses with input from 38 companies and investors and 14 NGOs and ESG standard-setters.
Food producers, retailers and manufacturers can now accurately report on the sustainability impact of their alternative proteins’ businesses following the launch of two new reporting frameworks designed by the London-based FAIRR Initiative investor network and The Good Food Institute (GFI), a Washington, D.C.-based international nonprofit.
FAIRR and GFI created the new frameworks with input from 38 companies and investors and 14 NGOs and ESG standard-setters, among them Unilever, EAT Just Inc., Newton Investment Management, PIMCO, Blue Horizon and the WWF-UK. The authors of the frameworks will work with alternative protein brands that want to use the frameworks to report on environmental, social and governance (ESG) factors such as carbon emissions, land, water and nutrition impacts.
Alternative proteins and cultivated meat, seafood, eggs and dairy, are expected to provide a pathway to decarbonizing food production while meeting the global demand for protein. Over the past few years, investment in alt proteins has increased by an average five-year growth rate of 91% through 2021, according to GFI analysis of PitchBook data, with sales estimated to rise by as much as $1.1 trillion by 2040. However, while research has shown that many plant-based meat products have much less of an environmental impact than their meat-based equivalents, there were previously no comprehensive standards for alt-protein manufacturers and suppliers to assess and disclose the kind of ESG data that investors, companies and consumers need to make informed decisions.
FAIRR and GFI’s open-source Alternative Proteins ESG Reporting Framework for Specialized Companies (Specialized Framework) and the Alternative Proteins ESG Reporting Framework for Diversified Companies (Diversified Framework) aim to provide accurate information from each alternative protein business. The Specialized Framework is designed for manufacturers and ingredient suppliers whose core focus is alternative proteins such as meat, dairy or whey protein, or gelatin. It encapsulates the most material risks and opportunities with regard to sourcing, certification, consumer engagement, soil health, plastic waste, water consumption and nutrition.
The Diversified Framework is designed for incumbent food companies, retailers, manufacturers and animal protein producers with product portfolios that include both conventional and alternative proteins. It guides reporting on ESG data related to the alternative-protein portion of companies’ businesses, for example on lobbying, water management, circularity and affordability, that complements data that they are likely already reporting via other frameworks. Enabling decision-makers to draw comparisons between their animal and alternative-protein business, the Diversified Framework supports companies as they transition their practices to meet a range of climate, biodiversity, social and governance-related goals.
“We are thrilled to produce a reporting tool that will allow alternative protein companies to showcase the many ESG advantages of their current business models,” said Sharyn Murray, GFI’s investor engagement manager. “Alternative proteins offer meaningfully lower greenhouse-gas emissions as compared to conventional animal protein, as well as considerable food safety and nutritional advantages. 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.”
Added Jeremy Coller, chair and founder of FAIRR, and chief investment officer at Coller Capital: “[T]hese 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. We expect that FAIRR’s members, representing $68 trillion [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 specialized alternative-protein companies adopt it, which will benefit the market as a whole.”
With standardized mandatory climate and nature-related disclosures soon expected to become a requirement in certain regions, both of the new frameworks will enable the food industry to assess impacts and establish best practices in the alternative-protein sector. The new frameworks are also expected to spur investment by equipping financial institutions with a toolkit of disclosures and metrics to gain transparent and actionable insights into a company’s activities, highlighting the reduced impacts of alternative proteins in comparison with those of their conventional counterparts.
The introduction of the frameworks comes on the heels of the launch of The Plant Based Foods Institute (PBFI), a sister nonprofit organization of the Plant Based Foods Association, which will work domestically and internationally with stakeholders at every stage of the supply network to identify, implement and evaluate effective approaches to further business and policy best practices in support of a regenerative, plant-based food system.