Industry trends

Strong labour management policies and practices that leverage worker voice to identify and address issues as they emerge, strengthen a company’s ability to navigate wider industry trends and mitigate social risk.

Automation efforts continue

Due to the intricate, precise nature and high speed of meat processing work, and the historical low cost of labour, automation in this industry is behind other manufacturing sectors.^46,47,48 However, large meat companies are increasingly ramping up their automation efforts to combat labour shortages, rising labour costs, and to address the dangerous nature of the job.^49,50

Despite all engagement companies implementing automation to differing extents in their operations, none has conducted an assessment on how this strategy will impact the workforce One company consults unions to determine how workers in roles replaced by automation can be reskilled and/or relocated. A second company invests in reskilling and retraining but there is no evidence of consulting with workers or their representatives on the process. A recent study by Bain & Co. suggests that companies will benefit from integrating workers at the heart of the automation effort to warrant the success and scale of automation efforts, ensuring alignment with business objectives.⁵¹

Climate ambitions overlook social risk

The animal agriculture sector contributes 35% to 63% of the global food system’s emissions, accounting for up to 19.6% of global anthropogenic greenhouse gases.^52,53 When combined the six engagement companies produced more GHG emissions than Colombia in 2022, which ranks in the top 20% of countries worldwide for total GHG emissions output.^ii,54Many companies in the sector are beginning to set ambitious climate targets and, in place since May 2023, new SBTi FLAG guidance requires companies to make targets even more specific to their activities.⁵⁵

Every company in this engagement has set some sort of emissions reduction target, and three of the six are members of the Business Ambition for 1.5 campaign. The onset of climate mitigation strategies in the industry raises a call for a just transition approach. At present, none of the engagement companies have reported conducting assessments on how their climate mitigation strategies could impact workers. These initiatives could create a need for retraining or upskilling workers and could result in job losses, meaning workers need to be consulted throughout the process to manage impacts.

ⁱⁱFAIRR analysis of Bloomberg data.

Given the emissions intensity of meat supply chains, meat processing companies will struggle to deliver on their climate ambitions without diversifying their protein portfolios. While all six of the companies in this engagement have some form of plant-based offering, none of the companies tie this strategy to their climate ambitions. Plant-based production has the potential to contribute greatly to green job creation.⁵⁶While this potential remains uncertain, companies in this engagement are yet to conduct impact assessments of their emerging protein businesses which might help identify areas where retaining and reskilling could help meet the skills gap and retain workers.

"When combined the six engagement companies produced more GHG emissions than Colombia in 2022, which ranks in the top 20% of countries worldwide for total GHG emissions output"

Just Transition

The International Trade Union Confederation (ITUC) defines a Just Transition as an economy-wide process aimed at ensuring communities and workers who rely on carbon-dependent industries are not made to bear the burden of a change towards sustainable and/or low-carbon production.⁵⁷The process is based on a social dialogue between workers, employers, and governments to develop necessary plans, policies, and investments.⁵⁸For corporations, this means creating a company-wide strategy to integrate the results of social dialogues with workers, and unions, and suppliers, into climate change mitigation efforts, to maximise the positive effects for the workforce and their communities, such as decent, green job creation.^59,60

Of the six companies in this engagement, only Cranswick and Tyson report engaging their workforce on sustainability issues, yet it is unclear if this includes levelled dialogues on climate strategy. Overall, none of the companies report consulting workers on how the climate strategy will be implemented, and only Marfrig reports that it engages its suppliers on the climate transition—and its other ESG standards. Companies need to work directly with social stakeholders, including workers, communities, suppliers, farmers, and Indigenous groups, to learn from their unique and knowledgeable perspectives for the transition to be a smooth one with benefits for all involved.

Lead example: Danone

Danone has committed to becoming Net Zero by 2050, and publicly discloses its support for a Just Transition.⁶¹Danone’s Climate Transition Plan explains that the company has “a responsibility to deliver a just transition to a low-carbon economy, addressing the human rights risks and impacts of climate change as well as the impacts our mitigation and adaptation actions have on people”, demonstrating a good understanding of the principles and importance of a Just Transition.^62,63

In terms of actions, Danone provides farmers in its supply chain with support transitioning to regenerative agriculture, including equipment, funding, and training, among other things.⁶⁴In addition, the company’s FutureSkills initiative is designed to equip workers with the skills needed to adapt to the changing labour market through consultations with worker representatives, the identification of new jobs that will increase in importance and roles that will need greater resourcing in the future, and training programs tailored to each employee.⁶⁵ A positive outcome of the FutureSkills initiative is Project Avenir, which provides learning modules for employees at Danone’s Villecomtal site in France to transition towards the production of plant-based products.⁶⁶While Danone’s disclosure lacks an explicit Just Transition strategy, it is currently a leading example of how protein-producing companies can begin to implement policies and practices in line with a Just Transition.

Just Transition also requires a policy-based approach

Policymakers have a crucial role to play in ensuring a smooth transition for workers as companies ramp up automation and the implementation of climate change strategies. There have been some efforts from the private sector to mainstream Just Transition measures into companies’ internal policies, such as the Climate Action 100+ Net Zero Company Benchmark, which includes a Just Transition indicator and assesses companies based on measures like Just Transition plans and retraining/redeployment and/or compensation policies for workers.⁶⁷However, there have been limited public policy initiatives encouraging these efforts, with notable exception of the EU Just Transition and the UK Just Transition Fund. There have also been public policy initiatives to support a just transition for workers, such as the EU Just Transition Mechanism and the Just Transition Declaration agreed at COP26, though these frameworks tend to focus on the energy sector, rather than agriculture/food.^68,69

To put in place such policy frameworks more widely, policymakers, in close consultation with workers and companies, should implement programs and regulations to help workers identify new occupations and receive the re-skilling and training required to pursue them.⁷⁰Governments should also develop or strengthen existing mechanisms for social dialogue with workers, trade unions, and companies to

ensure that workers are able to contribute to proposed ‘measures, programmes and activities to shape their socio-economic situation’.⁷¹This could also include aligning internal company policies with workers’ interests through impact assessments, worker consultations, and other measures to manage the potential negative impacts of automation and climate change strategies, including the diversification of product portfolios.