24th June 2024 Mumbai, Maharashtra, India Amidst soaring temperatures, a rising population, fluctuating crop yields, and changing dietary patterns, India’s nutritional security faces complex challenges. Food companies are under increased scrutiny from consumers, and investors, and rising regulations on supply chain disclosures for sustainability. What is the current state of India’s listed food companies regarding their protein sourcing and supply chains? How do they compare with other major Asian companies, and what are the key sustainability issues and interdependence in India? The latest Asia Protein Buyers 100 report by Asia Research & Engagement (ARE) reveals that there is some progress since the 2022 baseline report, but still a significant distance to cover in the journey towards responsible and sustainable sourcing across the region. This is especially urgent in India, presenting an opportunity for leadership and greater nutritional security.

Cover Image of Asia Protein Buyers 100 Report

The assessment by ARE evaluated 100 regional protein buyers on 40 indicators across 10 sustainability themes, per the Asia Protein Transition Platform investor expected disclosures. The companies include listed manufacturers, restaurants, retailers, and hotels across more than 10 markets, with a combined market capitalisation exceeding USD 563 billion. Designed as a benchmark for investors, banks, and companies striving for responsible and sustainable sourcing, ARE plans to conduct the assessment every two years. The findings highlight a pressing urgency for responsible and sustainable sourcing among Asian food companies, focusing on the supply chains of animal protein as the most resource-intensive and impacting aspect of our food system. This issue is especially critical for India, where food systems account for 14% of the country’s total greenhouse gas (GHG) emissions. Enteric fermentation in livestock is the leading cause, contributing to more than half of these emissions.

“Asia’s protein buyers still need to confront the deeply problematic social and environmental impacts and dependencies along their supply chains,” said Kate Blaszak, Director of Protein Transition and Co-author of the report, “The Asia Protein Buyers 100: An Assessment of Responsible and Sustainable Sourcing.” “These direct and indirect impacts pose direct risks to the companies, their investors, lenders, and customers. Forward-thinking protein buyers are tackling these risks as a market opportunity, gaining a competitive and financing edge, and working gradually to rebalance our food system with new plant-based and other smart protein offerings.”

The average overall score for the 100 companies was just 9%, with no company scoring above 50%. The average score across 12 major listed Indian companies was only 7%. “Such low scores might seem disheartening,” said Rituj Sahu, India Director for Protein Transition, ARE. “But there’s increasing awareness of the impacts and inefficiencies of our food system, a strong push from the regulatory authority SEBI, and an opportunity for Indian companies to demonstrate leadership and set integrated sustainability strategies, targets and policies by 2025.”

ARE identified the ten highest scoring companies—listed in Thailand, China, and Japan—as “Evolving Strategically”, for making it into tier three of six possible tiers. Companies scored best in the assessment of public disclosure related to protein supply chains on Water & Waste (20%), and poorest on Governance (2%). Results of key themes of priority to Platform investors include:

Labour & Just Transition: average score of 13%. While 23 companies have supplier codes of conduct, only two demonstrate due diligence in labour practices along their supply chains.

Responsible Antibiotic Use: average score of 3%. Only one company has a policy to avoid routine preventive antibiotic use, reflecting a low recognition of the risks associated with this major use of antibiotics and resistance.

Animal Welfare: average score of 7%, with only one company aligning its policy with Farm Animal Responsible Minimum Standards (FARMS) and three setting cage-free commitments.

Climate Change: average score of 12%, with emerging inclusion of indirect emissions but reluctance among most companies to tackle indirect emissions in their supply chains and set science-based reduction targets.

Deforestation & Biodiversity: average score of 5%. 26 companies acknowledge the risk of deforestation in their supply chains, but only two have set zero-deforestation deadlines.

Protein Diversification: average score of 5%. While 33 companies offer plant-based proteins, only two have set targets to increase sales, or to help capture the potential flexitarian consumer segment.

The report highlights significant economic and trade implications for India, particularly the risks to its USD5 billion annual shrimp export business from antibiotics overuse or labour concerns. Against this backdrop, the growing importance of sustainability in decision-making, driven by customers, suppliers, governments, and investors, alongside SEBI’s stance on ESG reporting, offers Indian companies an opportunity to lead in ESG disclosures and nutritional sustainability regionally. The report urges Asia’s protein buyers to enhance their efforts through integrated sustainability strategies, emphasising indirect risks and prioritising interdependencies. This approach will protect and create value for themselves, investors, and lenders while also securing nutritional security and sustainability.

Interdependencies include the linkages between GHG emission reduction and protein diversification for long-term mitigation. They also encompass the connections between improved farm animal welfare, enhanced food quality, reduced antibiotic use, better public health, and, in some cases, reduced emissions, feed requirements, and production costs in the short term.

Actionable recommendations include:

  • Protein buyers to develop and publish policies, targets, and commitments by 2025 that:
  • strengthen governance around protein sustainability, as part of an integrated business strategy,
  • strengthen traceability, transparency, and labour due diligence,
  • protect health and safety via clear principles on responsible antibiotic use,
  • improve animal welfare towards FARMS, starting with policies and cage-free commitments for eggs and no permanent tethering of dairy cows;
  • commit to zero-deforestation, to protect biodiversity and help reduce emissions,
  • source seafood sustainably, growing the use of independent verification, and
  • diversify further with alternative proteins, setting a sales target to help drive uptake and scale.
  • Companies can refer to the Platform to support their sustainability journey and reach out to ARE with the confidence of investor-backed engagement.
  • Buyers, suppliers, investors, and financiers should collaborate, accelerating the implementation of a responsible and sustainable protein transition in Asia by 2030.

Protein buyers assessed in this report and their respective tiers can be found here: drive.google.com/file/d/1txt6kuYbdmx2sXmyHyr9dwjbQ6_uWatB/view.

India’s listed companies are highlighted in bold. Note: The names of these companies have been abbreviated for ease of presentation. Please refer to the report for full names and company details.