Having consistent and comparable metrics that companies report on is important to allow financial institutions and investors- going forward referred to as ‘financial institutions’- to understand which companies are performing better, and which companies represent the greatest risks.
Having consistent and comparable metrics that companies report on is important to allow financial institutions to understand which companies are performing better, and which companies represent the greatest risks.
Financial institutions should consider ongoing and prospective investments in meat and dairy production and consumption in the context of a transition to increasingly plant rich diets and the need to halve levels of meat and dairy consumption by 2030. Risks linked to climate change, including production volatility will become increasingly important considerations.
Financial institution risk evaluation should include:
- Building increased investor awareness of the risks and opportunities that exist for meat and dairy companies.
- Full disclosure of investments and assets in meat and dairy by asset owners, such as banks, pension funds and insurers.
- Investor development of metrics to ensure consistent and comparable reporting by food companies to track their transition to ‘less and better’ meat and dairy. These should extend to the entire animal protein value chain, including animal feed producers, meat producers, retailers, caterers and restaurants. The reporting process should include measuring progress on sustainability targets developed for their sector.
- Consider the risk of existing or prospective investments in companies engaged in meat and dairy, particularly for those with the worst records for environmental, animal welfare and human health impacts.
- Use the BBFAW Benchmark to assess the progress of companies in dealing with risks around animal agriculture.
- Financial institutions should require the companies they fund to have clear policies to limit methane and greenhouse gas emissions, alongside biodiversity loss, particularly arising from agriculture (including Scope 3). Banks should include this requirement within their lending agreements. They should also demand that companies provide quantified, independently verified, full (scope 1, 2, 3) methane emission disclosure, and also report annually on their progress with respect to limiting emissions.
- Financial institutions should report annually on their progress with respect to limiting methane and climate emissions, alongside limiting biodiversity loss, including those from agriculture.
- Financial institutions should set an investment policy linked to quantitative, time-framed and science-based greenhouse gas emissions reduction targets (with public disclosures to ensure accountability). These need to extend to agriculture and in particular livestock and for methane, should be aligned to the Global Methane Assessment’s recommendations.