Less than 20% of Asia’s listed food buyers recognise animal protein sourcing risks: study

ASIA’S listed food buyers are far behind global players when it comes to addressing risks related to how they source their animal proteins – chicken, eggs, pork, fish and the lot. Most of the players are not even acknowledging that the issue exists, a study has found.

The study was conducted by independent ESG (environmental, social and governance) risk and strategy consulting firm Asia Research and Engagement (ARE), and it looked into the disclosures of 158 listed companies that are in the food business across 10 markets in Asia.

Singapore-listed companies included in the study were manufacturers Fraser & Neave and QAF; supermarket operator Sheng Siong Group; F&B operators Jumbo Group, Old Chang Kee and Japan Foods Holding; and those in the hotel and catering business. 

Companies primarily involved in animal production were excluded.

The study found that while 72 per cent of the companies have some form of sustainability reporting, their reporting largely focused on reducing waste, water and climate emissions peripheral to the core business, and labour conditions in sourcing or employment.

“Few had acknowledged, let alone addressed core sustainability risks associated with animal protein sourcing,” said ARE, which states it as its purpose to “bring the voice of investors in support of solutions to Asia’s sustainable development challenges”.

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While 70 per cent of the companies provide some form of food safety management disclosure and 62 per cent acknowledge responsible sourcing as a business issue, only 16 per cent have in place a responsible sourcing policy, ARE pointed out.

On a closer look, 13 per cent acknowledged antimicrobial use or resistance risks in animal protein sourcing; 11 per cent acknowledged animal welfare risks in animal protein sourcing; and 18 per cent acknowledged sustainable seafood sourcing. None of the companies acknowledged deforestation risks in animal protein sourcing.

ARE, meanwhile, highlighted that none of the Chinese, Indonesian or Taiwanese companies included in the study indicated a protein sourcing policy. 

Not a single Malaysian or Indonesian company reviewed acknowledged antimicrobial use, animal welfare or deforestation risks as well, it added.

Companies from more developed markets such as Hong Kong, Japan and Singapore scored somewhat better on average – ascribed a score of 47, 41 and 36 respectively upon 100 – but significant gaps were found, ARE said.

For instance, Singapore companies scored higher on the percentages of companies that provided sustainability reporting (96 per cent), disclosed a food safety management system (74 per cent) and acknowledged sustainability risks in sourcing seafood (23 per cent).

But none of the Singapore companies acknowledged antimicrobial use or resistance risks – half of the companies in Taiwan addressed this – and only 9 per cent acknowledged animal welfare risks in protein sourcing, when Hong Kong has 27 per cent of companies doing so.

Singapore companies came in just slightly above the study’s 16 per cent Asia average when it came to the proportion of companies that provide a responsible sourcing policy, but lagged behind Hong Kong (40 per cent), Thailand (24 per cent) and Japan (23 per cent).

Indonesian companies were the lowest scoring across the board, followed by companies listed in the Philippines.

ARE, which was founded in 2013, is headquartered in Singapore. Other themes it is currently watching include energy transition and its financing, and sustainable real estate.

ARE conducted the animal protein study as material risks that these companies, their investors and shareholders will face are on the rise, even as the region is projected to account for 60 per cent of the growth in global animal protein demand by 2030.

Tightening global regulations, such as a recent move by the European Union to include due diligence for business supply chains, are set to impact ESG requirements around protein sourcing practices, it pointed out.

Unsustainable practices in animal protein production are linked to deforestation, carbon emissions and growing antimicrobial resistance through poor animal welfare, it added.

It cited that industrial animal farming is the leading cause of deforestation and biodiversity loss, water, and air pollution, and the second-largest greenhouse gas emitter, accounting for at least 16.5 per cent of global greenhouse gas emissions,

According to the UN Food and Agriculture Office, Asia currently produces 88 per cent of farmed fish, 90 per cent of crustacea, 58 per cent of pigs, 35 per cent of chickens and 65 per cent of eggs for annual global consumption. This translates to more than 38 billion terrestrial animals a year.