LISTED food procurers in Asia, including Singapore-listed F&N, Sheng Siong and QAF, have failed to meet investors’ expectations on their sustainable sourcing strategies, according to a report by sustainability-focused consulting company Asia Research and Engagement (ARE).
None of the 100 food buyers assessed in the report scored above 50 per cent, based on a scoring system developed by the authors. They reviewed the public disclosures of these companies against a set of criteria which includes traceability and sourcing, work health and safety, animal welfare, climate change, as well as deforestation and biodiversity.
These 100 companies – which have a total market capitalisation of US$563 billion as at June last year – were selected based on both their stock market capitalisation and their position in their main market.
Although the report did not reveal the individual score of the companies, they were ranked across six tiers, with each representing a scoring range.
None of the companies assessed were in Tier 1 (more than 75 per cent) and Tier 2 (between 50 and 75 per cent).
There were 10 companies listed in China, Japan and Thailand that emerged as industry leaders, with scores of between 25 and 50 per cent and were placed in Tier 3.
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F&N was in Tier 4 (between 10 and 25 per cent), while Sheng Siong was in Tier 5 (between 5 and 10 per cent).
QAF was in the last tier, along with 43 other companies that scored less than 5 per cent. The Business Times has reached out to all three companies for comment.
The report found that awareness and action on transitioning to responsible and sustainable proteins by Asian-listed food buyers remain low, with an average score of only 9 per cent across the board.
“Asia’s food buyers have yet to fully confront the social and environmental impacts and dependencies of their supply chains,” read the report.
Companies, on average, scored best in labour and just transition issues, with 23 companies having a code of conduct for suppliers on protein and core labour principles, though only two of them have demonstrated due diligence of labour in their supply chains.
They performed the worst on responsible antibiotic use, with low recognition of the supply chain risks of antimicrobial resistance from routine overuse of antibiotics on farm animals. Only one company has set a policy to avoid routine preventative antibiotic use.
The report stated that Asia’s protein buyers need to urgently boost efforts to reduce sustainability risks in their supply chains to protect and create value for themselves, as well as investors and lenders.
“Companies, investors, and consumers will face growing risks as the effects of climate change, deforestation, antimicrobial resistance and other issues impact society. These will create a drag on economic productivity and cause disruption, including to the food system,” read the report.
Speaking on the findings at a webinar on Thursday (Jun 13), Kate Blaszak, one of the authors of the report and director of protein transition at ARE, noted that the food procuring sector in Asia possibly has lower levels of traceability than the garment industry, which is also well known for having problematic supply chains.
She encouraged companies to engage more with their suppliers to train and support them towards more responsible and sustainable sourcing.
Other recommended measures in the report include:
– training company boards to identify key protein risks
– conducting more rigorous checks on high-risk suppliers on labour standards and human rights
– strengthening traceability and transparency of how they source proteins
– setting clear principles for responsible antibiotic use
– enhancing animal welfare with cage-free systems for egg and pork production for a start
– committing to zero deforestation by 2030
– diversifying into alternative, plant-based proteins
