Maitland/AMO Sustain – In the Hot Seat with Jo Raven, Engagement Manager at the FAIRR Initiative

by Zara de Belder | 11th August 2020

Welcome to ‘In the Hot Seat’, a fortnightly series where we tackle some of the biggest questions facing sustainability professionals across a range of industries. We’ll also explore what sustainability means and how it is interpreted across different sectors and geographies.

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This week, Zara de Belder, Head of Maitland/AMO Sustain catches up with Jo Raven, Engagement Manager at the FAIRR Initiative, a collaborative investor network that raises awareness of the ESG risks and opportunities caused by intensive livestock production. In this edition, Jo tells us more about the network’s latest report on sustainable proteins, Appetite for Disruption: A Second Serving. The report is an update to FAIRR’s sustainable proteins engagement with 25 global retailers and manufacturers, which is supported by 88 investors representing over $13 trillion in assets.

1. Analysis by the FAIRR Initiative shows that the alternative protein sector is set to be worth $17.9 billion by 2025. What’s driving demand?

It is a combination of factors. The food industry is undergoing significant change. Consumer perception and demand is changing rapidly, especially in Asia where concerns around food safety and the link between increased disease prevalence and intensive animal production is driving consumers to reconsider their protein sources. In China, pork consumption is estimated to drop by about 35% this year, which is significant given the country accounts for 40% of
global pork demand.

This shift has coincided with the accelerated development of food technology, which is giving no indication of slowing down. As a more sustainable alternative to meeting global protein demand, the opportunity for plant and cell-based proteins is therefore enormous. For example, despite the uncertainties global markets are facing today, investment in the space is at an all-time high. The first half of 2020 has already seen $1.4 billion invested in plant-based and cell- culture technologies. This is more than double the investment in the whole of 2019.

And today’s crisis has further exposed the systemic weaknesses in global protein value chains, which were already under significant pressure for their contribution to climate change, land degradation, biodiversity loss and antimicrobial resistance. Clearly, supply-side interventions are not enough to address the growing ESG challenges in this sector, which is why last year the IPCC pointed to protein diversification, which means shifting towards more balanced and diversified protein sources including plant-based and alternatives sources like insects as a major climate mitigation strategy, with the potential to reduce 0.7-8 gigatons of C02 per year by 2050.

2. The report urges companies to think strategically about transitioning to less resource-intensive food products. What should food retailers and manufacturers be prioritising?

Our new report is an update to our Sustainable Proteins Engagement with 25 global food retailers. Since it began in 2016 (with 40 investors managing $1.25 trillion of assets) FAIRR’s Sustainable Proteins Engagement has grown ten-fold to include 88 investors managing over $13 trillion in assets in 2020. The coalition of investors, including Amundi, Northern Trust Asset Management and BMO Global Asset Management. It aims to encourage 25 global food retailers (15) and manufacturers (10) – including Nestle, M&S, Sainsbury’s, Carrefour, Costco, Amazon and Walmart – to diversify their protein sources to drive growth and reduce risk in a post-COVID, resource-constrained world.

Food retailers and manufacturers should be assessing their current and future risk exposure to animal protein supply chains using risk assessments and scenario analysis and looking to transition their portfolios to less resource intensive ingredients and food products. This requires the development of a board-endorsed, cross-functional strategy that includes R&D, marketing, and sustainable resourcing. It also requires establishing clear goals and milestones that are supported by the right metrics to measure progress year-on-year.

3. What effects has COVID-19 had on the alternative protein sector?

Absolutely. It has massively catalysed interest. Goldman Sachs said coronavirus has made oil and livestock one of the two most precarious commodities for investors next year. Covid-19 could be the straw that could break the industry’s back.

A key issue is that Covid-19 is just the latest in a long-line of zoonotic diseases including SARS (2002), H1N1 Swine Flu (2009), and MERS (2012). According to the CDC 3 out of every 4 emerging diseases are zoonotic. Most of these come from livestock. So what biosecurity measures can the industry put in place to prevent the next zoonotic pandemic emerging? Can it ensure social distancing in meat plants? As one professor recently said, “If you actually want to create global pandemics, then build factory farms”.

Consumer worldwide are also rethinking how they eat and what they eat amidst supply chain disruptions and public concern over the link between meat production and viral diseases. We’re already seeing customers vote with their feet. In the US, sales of plant-based meat alternatives were up 200% in in mid-April compared to last year, and shares of Beyond Meat have risen over 70% this year at this current moment.

4. If you have one piece of advice for someone considering a career in responsible
investing, what would it be?

That is a tough one as I have a few! But if I had to choose one, it would be to develop your problem solving and creative thinking. The world is facing unprecedented environmental and social challenges, and it is often very easy to become highly critical about companies, sustainability commitments, and investment strategies. However, I think what makes a candidate stand out is their ability to come up with creative solutions to these challenges, and ways to address or change current practices and thinking.

5. Finally, what does sustainability mean to you?

For me, sustainability is the evolution of one-dimensional business and economic models towards multi-dimensional models that are connected to our environment (both from an ecological and social perspective). It means long-term resilience.

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About the Author

Zara de Belder

zdebelder@maitland.co.uk

Zara is Head of Maitland/AMO Sustain and specialises in ESG communications and strategy development

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