MARIA LETTINI: PUBLIC VALUE IN FOOD SUPPLY CHAINS

Maria Lettini is director of the FAIRR Initiative, a responsible investors network focused on global food supply chains and understanding antibiotic resistance, social and climate risks.

Listen to the podcast:

Highlights of our conversation:

  • The term “responsible investors” is becoming obsolete. The market now recognises that sustainability equals responsibility, and that all investors have a responsibility to make good use of the capital, beyond making profit. FAIRR brings together institutional investors as part of their member network to use their influence and change food supply chains for the better, or at least to make less harm.  
  • As future generations focus on sustainability, family investors are increasingly concerned about sustainable impact. Institutional investors have come to understand that environmental and social risks impact the long-term value of investment portfolios, and that “sustainability factors” are actually very material. 
  • Last year FAIR published “The Coller FAIRR Protein Producer Index”. They identified the 60 largest listed fish and dairy producers globally, and analysed how they manage environmental and social risks across their operations. The chosen ESG risk factors in the food supply chains were greenhouse gas emissions, deforestation and biodiversity management, water scarcity and water use, working conditions, waste and water pollution, etc. We found that there was not a lot of publicly available information on how these companies were managing risks across these nine risk factors when, in fact, investors need to be aware and engaged with these companies in order to ensure that we were safeguarding, not only human health, but also the environment and natural resources.
  • Most people don’t know that the majority of antibiotics going into the food system is given to perfectly healthy animals in order to prop up a livestock farming system that typically is not very well ventilated. Antibiotics are needed in such system to maintain the health of animals. They are given small doses of antibiotics every single day in their food and water, which means that naturally bacteria in this system are becoming resistant and that resistance has the ability of transfer to humans, making humans resistant to certain types of antibiotics, which could be catastrophic as antibiotic resistance grows through the animal and human health circles. This is a critical issue that investors should be aware of. 
  • There are lots of alternatives to antibiotics. Some producers are using probiotics; there are vaccines. One of the biggest challenges to the industry is also that there are not enough incentives for pharmaceutical companies to begin producing new antibiotics. It is extremely costly. Potentially hundreds of thousands of human lives could be lost to antibiotic resistance. We know this is occurring and we have the ability to mitigate.
  • Interestingly, vegans are not immune. The transference of antibiotic resistance is not because you’re eating the meat, it is bacteria that are naturally in our air that we are transferring in normal situations.
  • When our antibiotics engagement started three years ago we had 1.1 trillion of investors engaging with ten fast food companies. At that time there was not even one company that had a really meaningful policy regarding the use of antibiotics. Three years later we now engage with 20 companies and 19 out of these 20 companies have a policy and a strategy to reduce the use of antibiotics in their supply chains. Some are even moving toward measuring the quantity of antibiotics used in their supply chains.     

Additional resources:

The Coller FAIRR Protein Producer Index

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