Investor group warns livestock industry needs to do more on methane (updated)

Grieg Seafood ASA

01/12/2021 12:55

* COP26 methane, deforestation pledges a challenge - FAIRR
    * Just 18% of biggest companies measure some emissions
    * Most cattle producers have no deforestation policy

 (Adds comment from JBS and Tyson)
    By Simon Jessop and Ana Mano
    LONDON/SAO PAULO, Dec 1 (Reuters) - A global push to cut
methane emissions and end deforestation is at risk of being held
back by weak corporate efforts in the livestock industry, an
investor group said on Wednesday.
    More than 100 countries pledged to cut methane emissions 30%
and halt and reverse deforestation by 2030 at last month's COP26
climate talks, much of which will need to come from the
livestock industry. The U.N. food agency said livestock accounts
for 44% of man-made methane https://www.fao.org/news/story/en/item/197623/icode
 emissions.  urn:newsml:reuters.com:*:nL1N2RT0RX
    Yet less than a fifth of the world's biggest livestock
producers currently measure even some of their emissions, a
report from the FAIRR Initiative (FI), whose members manage more
than $45 trillion in assets, showed.
    "As the largest driver of both methane from human activity
and deforestation, the ambitions set at COP26 handed a big slice
of responsibility to the food and agriculture sector," said FI
Chair Jeremy Coller.
    "Yet failures from methane to manure management underline
the growing sense in the market that cows are the new coal." 
    In its fourth annual report, the group assessed 60 publicly
listed animal protein producers worth a combined $363 billion on
10 environmental, social and governance-related (ESG) issues
including emissions and antibiotic usage.
    Among those to score highly were Norwegian aquaculture firms
Mowi ASA  MOWI.OL  and Grieg Seafood  GRIA.OL , while the
highest ranking meat and dairy companies were Maple Leaf
 MFI.TO , Marfrig  MRFG3.SA  and Fonterra  FCG.NZ , all of which
were defined as "low risk".
    Fellow large producers including the world's biggest
meatpacker JBS SA  JBSS3.SA  and Tyson Foods  TSN.N , meanwhile,
were regarded as "medium risk." 
    JBS dropped points for reasons including its reporting on
animal welfare and employee working conditions, while Tyson was
marked down for reasons including that some of its sourcing is
from regions at risk of deforestation, FAIRR said.
    JBS told Reuters that boosting its ESG performance remained
a priority. On FAIRR's ranking, JBS noted it ranked 11 out of 60
companies, with an overall score of 57%, representing a six
percentage point improvement on 2020.
    Tyson said it engaged with FAIRR and provided feedback about
its commitments to preventing deforestation https://www.tysonsustainability.com/downloads/Tyson_Foods_Forest_Protection_Standard.pdf,
 including to begin sourcing verified deforestation free beef by
the end of 2021, with complete transition of its Australasia
sourcing by the end of 2025.
    FAIRR makes the findings public so other investors can use
them when they analyse company performance and in their
engagement with company boards.
    The report also found that 42 of 45 meat and dairy firms
that source soy for animal feed from areas at high risk of
deforestation, such as Brazil's Cerrado region, do not have a
policy to mitigate deforestation.
    The cattle industry has also done a poor job in monitoring
its broader supply chain, the report said, and is currently
missing up to 90% of the deforestation caused by indirect
suppliers.
    Nearly a third https://www.reuters.com/business/sustainable-business/brazil-audit-finds-32-jbs-cattle-amazon-state-irregular-farms-2021-10-07
 of the cattle bought by JBS in the Brazilian Amazon state of
Para came from ranches with "irregularities" such as illegal
deforestation, prosecutors found in a 2020 audit.
    "The science is clear that to avoid runaway climate change
high-emitting sectors such as agriculture must transform
themselves in the next decade. Yet FAIRR's latest research shows
how far the food sector has to go," said Eugenie Mathieu, senior
analyst at Aviva investors. 

 (Additional reporting by Caroline Stauffer
Editing by David Evans and Mark Potter)
 ((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052;
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