Risk factors explained

Deforestation & biodiversity loss

Soy-based animal feed and pasture for cattle are major drivers of deforestation, putting nearly a trillion dollars of annual turnover in publicly listed companies at risk.

Key stats

77
%
of Index companies rank as ‘high risk’ on this category.
10
%
of companies show evidence of a strong supplier code on deforestation.
2
/60
Bakkafrost, a salmon producer, and Marfrig, a brazilian beef producer, were the top performing companies in this category.

Meat and fish production is a significant driver of deforestation and biodiversity loss with growing demand for animal feed such as soy leading to the conversion of forestry lands to farmland. For example, 57% of suppliers to Brazilian meat producer JBS are based in the Amazon. Aquaculture can also drive biodiversity loss with sensitive ecosystems such as mangroves and coastal wetlands often converted to fish farms.  Fish farms can also cause water pollution, exacerbated levels of sea lice, overfishing to provide feed, and species loss due to farmed escapees. In 2016, the capsizing of one farm cage released 300,000 Atlantic Salmon into the Puget Sound near Seattle, threatening wild Pacific Salmon populations.

Other findings in this category:

  • Aquaculture companies received the highest average scores on this risk factor.  However, Asian-based aquaculture companies performed poorly on sector-specific risks.
  • 84% of the 50 terrestrial protein companies do not have a zero-deforestation target or policy.
  • Only 27% of companies show evidence of an NGO partnership and/or independent certification on deforestation or biodiversity.
  • Of the 24 companies that process beef or dairy, only one company met basic management and disclosure on this issue.
  • Bakkafrost, a salmon producer and Marfrig, a Brazilian beef producer, received the top scores for this risk factor.

*Companies with ‘multiple’ proteins derive significant revenues from more than one protein source.