GFI and FAIRR launch new, gap-filling ESG frameworks for the alternative protein industry

First-of-their-kind frameworks raise the bar on sustainability reporting, increasing transparency of the environmental and social impacts of alt proteins and enabling direct comparisons with animal protein products.
Field at sunset

New frameworks raise the bar on sustainability reporting for the alternative protein industry

  • What and why: FAIRR and GFI launch new first-of-their kind reporting frameworks for alternative meat, seafood, eggs and dairy companies to reveal their climate, biodiversity, nutrition, and other ESG impacts.
  • Who: Specialized alternative protein businesses and incumbent food companies are expected to use the new frameworks, as are investors seeking ESG data that highlights the risks and opportunities of alternative proteins compared to conventional protein production.
  • To learn more: Join our webinar on September 27th to find out more about the Frameworks. Register today.

Filling a critical gap

In our careers, we’ve both been lucky enough to take part in many moments, milestones, and projects that propel alternative proteins toward a future where they are no longer alternative. This week marks yet another key moment in time.  

Today, GFI and FAIRR launched two first-of-their-kind ESG reporting frameworks for the alternative protein industry. The new open-source frameworks fill a critical gap in the industry and help address the growing demand from investors and consumers for more in-depth ESG data and transparency. And to ensure they truly meet the needs of the market, input was sought from a diverse array of investors, companies, and NGOs— including Unilever, EAT Just Inc., PIMCO, Unovis Asset Management, and World Wildlife Fund-UK, as well as ESG and life cycle assessment (LCA) experts.

These new tools will help decision-makers across the global food system gain a clearer picture of how protein products—both alternative and conventionally produced—perform on climate and other key sustainability fronts critical to transforming our global food system. 

The big-picture “why”: What’s at stake

Conventional protein production—animal-based meat, eggs, seafood, and dairy—drives multiple risks: climate change, loss of biodiversity, land conversion and deforestation, and food insecurity, among others.  Globally, agriculture is responsible for roughly one-third of direct emissions.  Taken on its own, animal agriculture accounts for 20 percent of direct emissions.

On climate risk specifically, the latest IPCC report highlights the critical role of alternative proteins—including meat made from plants and cultivated from cells—in adapting to and mitigating climate change. A global transition to more sustainable meat production is increasingly acknowledged by the IPCC and other multinational bodies as critical to decarbonizing food production while meeting the global demand for protein.

Evidence-based research on the climate impacts of alternative proteins continues to grow. A recent study from Oxford shows that many plant-based meat products have less than a tenth of the environmental impact of meat-based equivalents. What has been missing, however, is a comprehensive set of standards for alternative protein companies to assess and disclose broader and deeper ESG data—spanning environmental, social, and economic impacts—that investors, governments, companies, and consumers need to make informed decisions. 

While recent years have seen record levels of investment in alternative protein companies, those investments are still miniscule compared to other impact-driven investments such as renewable energy and electric vehicles. Increased visibility of the long-term environmental and social impacts of alternative proteins compared with conventional proteins can catalyze further investments that meet global sustainability goals and accelerate the transition to a more secure and equitable protein production system.

A number of ESG frameworks already exist. Why the need for these new ones and how are they different?

Over the past few years, private investment in alternative proteins has increased by an average 5-year growth rate of 91 percent through 2021 (according to GFI analysis of PitchBook data). The industry’s rapid growth, as well as the increasing addition of alternative protein companies to sustainability investors’ portfolios, outpaced the inclusion of the industry into ESG standards. 

While industry-specific reporting guidelines have been created for many other industries, none existed for alternative proteins. This led many companies and investors to try to determine ESG monitoring and reporting approaches independently. With a third of global assets predicted by Bloomberg Intelligence to be managed according to ESG principles by 2025, such approaches are not only inefficient, but don’t allow for comparability and aren’t necessarily aligned with ESG reporting best practices. 

Currently, most ESG frameworks are voluntary, but mandatory reporting is likely to come into effect in the future. Leading financial institutions anticipate that governments will mandate climate reporting by 2025, overseeing a key component of ESG reporting. The world is marching toward greater climate accountability and organizations need frameworks that will help them prepare to measure and manage data, and translate it into meaningful disclosures.

Who will use the new frameworks and what will they measure?

The two frameworks are each designed for use by specific types of companies:

By completing the frameworks, companies will collate a wide range of ESG data that can inform product portfolio decisions and business practices, as well as deliver standardized industry-specific ESG data that investors are demanding. 

Both frameworks assess material ESG risks and opportunities – from emissions, commodity sourcing, land use, and water management, to nutrition, consumer engagement, and labor practices.  The Specialized Framework comprises a comprehensive set of metrics that align with established reporting standards (e.g., GRI, SASB, SBTi), leading to disclosures and metrics on alternative proteins that can be compared across portfolio companies—whether within the food industry or not. Meanwhile, the Diversified Framework is limited to metrics that supplement established reporting standards, allowing companies to highlight how their alternative proteins portfolio contributes to their ESG goals, while limiting the reporting burden diversified companies face.

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Voices from across the field

Companies that specialize in alternative proteins, like MycoTechnology, see the critical gap these new frameworks fill.

The Specialized Framework is amazingly thorough, and hits on every element of our corporate social responsibility strategy. We’re most excited about two key elements – climate impact and nutrition/health. The alternative protein industry was born to combat climate change. But it won’t go mass-market until it offers everyday consumers personal benefits like nutrition. For us, tracking and improving the sustainability of our operations is tablestakes, as is creating more nutritious products that can win consumers over. As the industry begins to adopt these frameworks, we will have a better way to work together with our partners (whether suppliers or customers) to build a complete value chain that is better for people and the planet.

Lisa Wetstone, MycoTechnology’s senior director of marketing, innovation, and growth strategy

For industry incumbents with products that include both alternative and conventionally produced proteins, the Diversified Framework can help them transition their protein portfolios and production practices to meet decarbonization and other corporate social responsibility goals.

“This comprehensive framework enables us to address the ESG risks and opportunities of alternative proteins, and is guiding our disclosures on topics that matter the most to stakeholders, in line with ESG best practices.”

Beatriz Hlavnicka, head of marketing LATAM at PlantPlus Foods, a joint venture between Marfrig and ADM
, in response to the launch of the Diversified Framework

Another key user group for these frameworks are investors who incorporate ESG considerations in their decision making, leveraging the frameworks to gain a thorough understanding of their investments’ impact.

As specialized investors in alternative proteins and food technology, we believe that measurement of impact metrics in this sector is of critical importance. Without a consistent and objective methodology to measure company impacts, it is challenging for investors to understand whether companies are truly delivering on their sustainability potential. The launch of these new ESG frameworks for the alternative protein industry by GFI and FAIRR is a very important milestone in this regard, as it will provide a consistent approach for companies across the sector to measure their impacts, and to lay the foundations for a successful long-term sustainability strategy. This in turn will help investors to understand company performance in a more detailed way, and to monitor impact over time.

Rosie Wardle, partner and co-founder of Synthesis Capital

Alternative proteins represent a significant opportunity for food retailers, manufacturers, and protein producers. The GFI/FAIRR reporting frameworks give investors the information necessary to assess and value companies and their supply chains in the transition to a low-carbon economy.

Jared Fernandez, senior ESG analyst and proxy voting manager at investor Boston Trust Walden

Making sustainability the default option 

We are thrilled to co-produce reporting frameworks that will allow companies manufacturing and selling alternative proteins to showcase the many ESG advantages of such products–from their meaningfully lower greenhouse gas emissions and land use as compared to conventional animal protein to food safety advantages. 

As such companies continue to partner with investors and work with governments to build responsible and sustainable businesses of the future, these new frameworks can guide best practices, and help them create a future where sustainable and socially responsible options are the more affordable, accessible, and default options. 

Both GFI and FAIRR are looking forward to sharing these new frameworks with companies and investors alike as resources that can move the entire field forward. A joint webinar and Q&A session planned for September 27th is now open for registration.  

As we reflect on this moment, it’s energizing to think about the global community of supporters that underpins this work. GFI’s work on these frameworks is made possible by our global community of donors—individuals and foundations who are committed to helping us advance the alternative protein ecosystem by focusing on solutions that are global, tractable, and high-impact. These new frameworks are the latest such solution. Their adoption and use by the entire field could be game-changing, helping hasten nothing short of a global protein transition toward a more sustainable, secure, and equitable food future.  

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Environmental, Social, and Governance framework

GFI & FAIRR’s ESG frameworks supply investors and companies in the alternative proteins industry with tools to monitor, measure, and report on risks and opportunities.

Authors

Sharyn murray, cfa

Sharyn Murray, CFA INVESTOR ENGAGEMENT MANAGER

Sharyn Murray crafts and executes strategies to support investors’ exploration of and investment in the alternative protein industry. Areas of expertise: relationship development, public speaking, project management, investment research.

Abby herd, fairr

Abby Herd

ESG ANALYST, FAIRR INITIATIVE

Abby joined the FAIRR Initiative in September 2021. She works within the Research & Engagements team, focusing on Sustainable Proteins. She holds a BSc in Geography with International Study from the University of Manchester and has recently completed a masters degree in Environmental Technology from Imperial College London, where she researched the decarbonisation of the NHS’s medical supply chain. She is passionate about climate change and social inequality, as well as the need to develop food systems that benefit both people and planet.