Introduction
JGP joined the FAIRR member network in 2021. This case study discusses how the team utilises FAIRR membership to integrate ESG risks and opportunities into management and stewardship efforts across JGP’s portfolio. Insights for this case study were provided by José Pugas, Partner & Head of ESG at JGP.
Why did you join the FAIRR initiative and what benefits have you received from membership?
"We joined the FAIRR Initiative because it provides cutting-edge research, tools, and collaborative engagement opportunities to help investors integrate environmental, social and governance (“ESG”) risks and opportunities through animal and alternatives proteins supply chains. We receive benefits from most of FAIRR’s research and reports, but with a deep dive for climate risk, biodiversity, and animal pharma. For us, as investors in the food sector, it is fundamental to raise awareness of ESG factors in our decision-making, active ownership, and stewardship processes."
What impact has FAIRR membership had on your investment strategy?
"At JGP we have adopted a combination of strategies. In addition to screening and integration of methodologies, we have developed our own methodology analysis. Through development of our ESG Frameworks, we can identify, with quantitative and qualitative indicators, which companies are committed to ESG-related topics or are seeking to incorporate them in their business. Our ESG scores are a guide, but we believe in the integration of ESG factors through detailed knowledge of how industries affect the planet, in a systemic way, and through the incorporation of it in valuation models’ premises. We incorporate FAIRR’s research and report results into our ESG analysis process for the food sector, which has contributed to have a more accurate view of the companies."
Have you achieved any real-world positive outcomes as a result of FAIRR membership?
The Coller FAIRR Protein Producer Index Methodology was essential as an external ESG rating data to select which companies in the animal protein sector would be engaged.
"We used FAIRR’s Protein Producer Index methodology in our Deforestation-Free Active Ownership (DFAO) process. The DFAO is an engagement platform we developed with companies highly exposed to deforestation risk. We selected 6 relevant Brazilian companies and created 3-year engagement plan with these companies so we can help shift their business models to deforestation-free standards in time for the deadline of the FSDA (Dec 2025)."
Using FAIRR’s Research & Data
Has FAIRR data improved your understanding of a particular theme?
"FAIRR’s reports and webinars contributed to a better understanding of ESG themes. One example was the “Unpacking Labour Risk in Global Meat Supply” report that helped us understand the impact of the COVID-19 pandemic on slaughterhouses."
How do you use the Coller FAIRR Protein Producer Index data to inform portfolio construction?
"We have used data from the Coller FAIRR Protein Producer Index to assess our investee’s companies. For example, we looked at the risk factors of Deforestation & Biodiversity Loss and Antibiotics to help us in our analysis process. We also used the Climate Risk Tool 2.0 to help us define the target companies for DFAO. We combine FAIRR’s data with additional public information released by external sources and on the companies’ website."
Collaborating with FAIRR’s Engagements
Have FAIRR engagements improved your active engagements? If so, how?
"FAIRR’s data have improved our engagements by helping us to have better clarity about companies’ positions related to climate risks, deforestation, antibiotics, and other ESG subjects."
What changes have you seen in the strategy of the companies you have engaged with?
Once we showed FAIRR’s tools and research which highlighted how the competitiveness of companies is strongly correlated with the sustainability and traceability of their supply chain, the C-level attitude changed entirely and they created an action plan to deal with the presented criteria based on FAIRR’s methodology.
"We have observed a behavioural change in the food sector related to their commitment against deforestation in their supply chain. An example of this change was seen when a regional animal protein company was looking for funding for its internationalisation and IPO. This company is highly exposed to the risks of deforestation and others considered sensitive but was not convinced that the risk of the companies was being properly monitored."
Future with FAIRR
What would you like to see more of from FAIRR?
"We would like to see more webinars, such as the presentation of Livestock Production and Animal Waste Pollution Management, and greater presence of Brazilian companies in the FAIRR’s collaborative engagements."
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