food index

BREAKING: New Food Index Reveals ‘High Risk’ Meat & Fish Stocks Worth $152bn inc McDonalds, KFC Suppliers

A new food index has labeled 36 meat and fish suppliers as “high risk” for public market investors because they fail to manage critical business risks such as greenhouse gas emissions and antibiotics risk.

The high-risk companies, worth a combined $152 billion, include major suppliers to McDonalds and KFC, as well as the US’s third-largest poultry producer Sanderson Farms. Brazil’s JBS, which was recently embroiled in a food safety scandal, was also classified as high risk.

The Coller FAIRR Protein Producer Index, which tracks 60 of the world’s largest food companies worth a combined $300 billion, assesses how these companies are managing critical sustainability risks ranging from pollution to the Paris Agreement, and food safety to worker safety.

The FAIRR (Farm Animal Investment Risk & Return) initiative is a collaborative investor network worth $5.9 trillion aiming to educate on the investment risks behind factory farming that was founded by private equity group Coller Capital’s chief investment officer Jeremy Coller.

The food index also reveals the food companies following best practices including “medium risk” US meat producer Tyson Foods, which FAIRR’s accompanying report highlights for the launch of its $150 million venture fund to invest in alternative meat startups and other sustainability-focused technologies. Norwegian aquaculture group Marine Harvest is the top-ranked company, in large part due to its approach to tracking and using antibiotics.

Antibiotic use in the production of meat and fish is a major risk to human health, according to the report, with 77% of companies failing to adequately manage or disclose antibiotic use, despite growing levels of regulation and international action to combat antibiotic-resistant superbugs.

FAIRR also discovered a lack of disclosure when it came to manure management, Aarti Ramachandran, head of research and corporate engagement at the group, told AgFunderNews. Just a quarter of land-based protein companies referenced the management of animal waste at all in their materials, which was surprising considering the increasing scrutiny of manure management and potential for fines in various countries globally, she added.

“Investors need ESG data and transparency to make better investment decisions, yet this information is lacking in the meat, fish and dairy sector. This is the first index to help investors bridge that knowledge gap,” said Coller in a statement. “As megatrends like climate change, antibiotic resistance and food technology radically reshape the way we produce and consume meat, fish and dairy, the Coller FAIRR index will help institutional capital identify both best in class companies and potential stranded assets in the food sector.”

Chinese companies faired the worst with 14 out of 16 in the index classified as high risk although Ramachandran said she was expecting to see low disclosure on ESG from the region.

“One of the key issues we have with some of largest dairy and pork producers in a country like China is that while they are disclosing on some issues, such as pollution, their statistics do not go deep enough to provide the full picture of their impact. For instance with pollution, they might disclose greenhouse gas emissions, but don’t include emissions from enteric fermentation or feed production in beef and dairy,” she said.

The companies in the food index are assessed on eight risk factors, each with underlying KPIs. The risk factors are greenhouse gas emissions, deforestation and biodiversity loss, water scarcity and use, waste and pollution, antibiotics, animal welfare, working conditions, and food safety. More on the methodology can be found in the report.

While both Ramachandran and Coller are vegetarians, not everyone in the FAIRR team is. “It’s a real mix but I think it’s fair to say that everyone is interested in sustainable food systems,” said Ramachandran.

Some large asset managers welcomed the index.

“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. “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. On antibiotics alone, FAIRR’s research shows that three in four of these companies are ignoring the calls from regulators, health professionals and the financial community to manage and reduce their use of antibiotics. That failure puts both global public health and their business models at risk.”

Overall Coller FAIRR Protein Producer Index ranking

Company Legal Name Market Cap ($bn) Country Final Score  

Ranking

Marine Harvest ASA 9.894 Norway 82 Low risk
Lerøy Seafood Group ASA 3.733 Norway 80 Low risk
Bakkafrost P/F 1.860 Faroe Islands 78 Low risk
Fonterra Co-operative Group Ltd 6.881 New Zealand 69 Low risk
Salmar ASA 4.726 Norway 67 Low risk
Cranswick PLC 2.120 UK 65 Low risk
Charoen Pokphand Foods PCL 6.963 Thailand 65 Low risk
Marfrig Global Foods SA 1.162 Brazil 62 Low risk
Hormel Foods Corp 17.789 USA 60 Low risk
Grieg Seafood ASA 1.035 Norway 55 Medium risk
Empresas AquaChile SA 0.580 Chile 53 Medium risk
Maple Leaf Foods Inc 2.919 Canada 53 Medium risk
Tassal Group Ltd 0.504 Australia 52 Medium risk
Grupo Nutresa SA 4.138 Colombia 50 Medium risk
Tyson Foods Inc 26.291 USA 49 Medium risk
Vietnam Dairy Products JSC 12.938 Vietnam 46 Medium risk
Scandi Standard AB 0.426 Sweden 43 Medium risk
BRF SA 6.906 Brazil 41 Medium risk
JBS S.A. 8.480 Brazil 38 High risk
China Shengmu Organic Milk Ltd 0.866 China 38 High risk
Pilgrim’s Pride Corp 6.093 USA 38 High risk
WH Group Ltd 15.632 China 36 High risk
MHP SE 1.458 Ukraine 36 High risk
RCL Foods Ltd/South Africa 1.337 South Africa 35 High risk
Inner Mongolia Yili Industrial Group Co Ltd 27.029 China 32 High risk
NH Foods Ltd 4.386 Japan 31 High risk
New Hope Liuhe Co Ltd 4.865 China 30 High risk
GFPT PLC 0.534 Thailand 30 High risk
QAF Ltd 0.416 Singapore 28 High risk
China Mengniu Dairy Co Ltd 18.555 China 28 High risk
Beijing Sanyuan Foods Co Ltd 0.944 China 27 High risk
COFCO Meat Holdings Ltd 0.631 China 27 High risk
LDC SA 2.549 France 26 High risk
Inghams Group Ltd 0.993 Australia 25 High risk
Nippon Suisan Kaisha Ltd 1.611 Japan 25 High risk
Great Wall Enterprises Co Ltd 0.840 Taiwan 24 High risk
Henan Shuanghui Investment & Development Co Ltd 13.366 China 22 High risk
Sanderson Farms Inc 2.735 USA 20 High risk
Shandong Oriental Ocean Sci-Tech Co Ltd 0.910 China 20 High risk
Muyuan Foodstuff Co Ltd 8.697 China 19 High risk
QL Resources Berhad 2.104 Malaysia 19 High risk
Fujian Sunner Development Co Ltd 2.702 China 18 High risk
Guangdong Wens Foodstuffs Group Co Ltd 17.537 China 17 High risk
Prima Meat Packers Ltd 1.407 Japan 17 High risk
Japfa Ltd 0.581 Singapore 16 High risk
Almarai Co JSC 14.766 Saudi Arabia 15 High risk
Fortune Ng Fung Food Hebei Co Ltd 1.324 China 14 High risk
Chuying Agro-pastoral Group Co Ltd 1.110 China 14 High risk
China Modern Dairy Holdings Ltd 1.047 China 12 High risk
Thaifoods Group PCL 0.705 Thailand 10 High risk
Australian Agricultural Co Ltd 0.590 Australia 10 High risk
Beijing Shunxin Agriculture Co Ltd 3.622 China 10 High risk
Venky’s India Ltd 0.827 India 7 High risk
Seaboard Corporation 4.467 USA 7 High risk
Cherkizovo Group PJSC 1.232 Russia 5 High risk
San Miguel Food and Beverage Inc 2.304 Philippines 5 High risk
Industrias Bachoco SAB de CV 3.118 Mexico 5 High risk
Cal-Maine Foods Inc 2.280 United States 4 High risk
Grupo Bafar SAB de CV 0.657 Mexico 3 High risk
Inti Agri Resources Tbk PT 0.532 Indonesia 0 High risk

One thought on “BREAKING: New Food Index Reveals ‘High Risk’ Meat & Fish Stocks Worth $152bn inc McDonalds, KFC Suppliers”

Leave a Reply

Your email address will not be published. Required fields are marked *