FAIRR's meat sourcing engagement series

OVERVIEW

This is a progress briefing from a series of investor engagements with six of the world’s largest quick-service restaurant (QSR) companies. The purpose of this engagement is to encourage these companies to analyse and reduce their vulnerability to climate change, water scarcity, and water quality issues stemming from animal protein production in their supply chains.

The briefing outlines an evaluation framework used to assess the companies’ risk management practices regarding these environmental concerns. It evaluates factors such as board oversight of environmental, social, and governance (ESG) risks, emissions reduction targets, scenario analysis in line with the Task Force on Climate-Related Financial Disclosures (TCFD), water use and quality management in the supply chain, and supplier policies.

This briefing serves as a valuable resource for finance professionals interested in understanding the environmental impact of the meat industry and the steps companies are taking to mitigate these risks. It provides insights into industry best practices, emerging trends, and potential financial implications of climate and water risks. By understanding these factors, finance professionals can make more informed investment decisions, engage with companies on their sustainability practices, and contribute to a more sustainable food system.

KEY INSIGHTS

Six of the largest global quick-service-restaurant (QSR) brands have now publicly stated they will set, or have already set, global GHG reduction targets.
There is growing consensus for more focus on reducing emissions and managing climate risk in agriculture and forestry.
Companies should push forward on assessing climate risks – especially given livestock production’s high vulnerability to these impacts.
As the QSRs begin to implement efforts to meet their emissions reduction targets, they have an opportunity to address water use and quality simultaneously.
Research by Oxford University finds that a health tax on red and processed meat could save over $40 billion in global healthcare costs.
WHO’s International Agency for Research on Cancer ranks processed meats as Group 1 carcinogens and identifies red meat as a probable cause of cancer.
Proposals for some form of ‘meat tax’ have been discussed in Sweden, Denmark, Germany, New Zealand and the Netherlands.