How to Ensure Alt-Protein Investments Advance Climate Goals

The Climate Bonds Initiative, an
international NGO mobilizing global capital for climate action, has launched its
Alternative Proteins
Criteria —
a new framework to provide investors, industry and policymakers with a
science-backed tool to drive meaningful, sustainable transformation in the food
sector.

A major contributor to climate change and biodiversity loss, livestock
agriculture is responsible for 60 percent of agrifood system emissions and
between 2–20 percent of global greenhouse gas emissions — despite only providing
17 percent of global calories and 38 percent of protein. Shifting away from
conventional meat and dairy production is considered one of the most promising
climate-mitigation strategies in the agrifood
system
— an assertion backed up by a 2022 report from BCG and Blue Horizon that
highlighted protein transformation as the most capital-efficient and
high-impact solution to addressing the climate
crisis.

By providing a science-backed framework for sustainable finance, these Criteria
will help unlock the capital needed to scale alternative proteins — reducing
emissions and environmental pressures from traditional livestock agriculture.
They also set clear eligibility requirements for Certification under the
Climate Bonds Standard,
ensuring that investments in alternative protein production and distribution
align with sustainability goals.

Applicable to various financial instruments — including Use of Proceeds for
Green Bonds and Sustainability-Linked
Debt
— this initiative aims to guide investment into a rapidly expanding industry
while ensuring meaningful climate impact.

“​The Alternative Proteins Criteria are the first of their kind in the market,
providing a unique framework for both use-of-proceeds and sustainability-linked
debt,” says India
Langley, Agri-Food
Sustainability Analyst at the Climate Bonds Initiative. “This framework is
designed to guide investment into this rapidly growing sector. With the
alternative proteins market projected to reach US$1.1 trillion by 2050, these
Criteria offer a critical tool to help scale up the necessary financing for
sustainable agrifood system transformation.”​

The Criteria cover production and distribution of several rapid-growth
alternative-protein categories intended for human consumption as an alternative
to animal-based foods — including:

• wholefood plant- and fungi-based proteins — Products made from
  protein-rich crops and mycelium with minimal processing (products made from
  e.g. minimally processed nuts, legumes, seaweed or mushrooms as alternatives
  to traditionally animal-sourced foods)

• traditional plant- and fungi-based proteins — ex: tofu, seitan, soy milk

• novel plant-based proteins — made using innovative processing techniques
  such as fractionation, extrusion or 3D
  printing
  (ex: plant-based burgers, dairy)

• fermentation-derived alternatives to animal-based proteins such as
  eggs
  and
  dairy

• cultivated meat — Meat products or ingredients grown from animal cells
  in a controlled environment (ex: cultivated
  beef,
  chicken,
  seafood)

• hybrid products —
  Products that combine multiple alternative proteins or other ingredients
  without traditional, animal-sourced ingredients

• blended products — Products that contain at least one of the specified
  alternative proteins alongside animal-origin products, with the plant-based
  protein replacing at least 60 percent of the animal-origin protein (Lidl’s
  industry-first hybrid minced-meat
  mix, with 40 percent pea
  protein, wouldn’t make the grade), as an alternative to animal-based foods.

Insect
proteins
were not included in the analysis.

These Criteria will focus on two main areas:

• Substituting some production and consumption of animal-source foods with
  lower-impact alternative proteins. This would mitigate the vast impacts of
  animal agriculture — the largest of which would arise by substituting beef
  and other ruminant meats, as these have the highest carbon and land
  footprints.

• Mitigating the impacts of alternative proteins themselves — with a focus
  on energy sources and use, raw materials and waste management. As most of
  the emissions for alternative proteins relate to energy use, single actions
  such as powering facilities with renewable instead of conventional energy
  mixes are significantly more effective in attaining reductions than these
  actions could be for conventional animal agriculture — where energy makes up
  a smaller proportion of the emissions profile.

The Criteria will focus clearly on climate and land-use impacts, while also
incorporating safeguards for other environmental issues such as water
pollution.
They will be informed by other standards in the market and recent policy
developments, with an aim to facilitate much needed progress towards climate-
and biodiversity-beneficial food supply chains.

As global demand for sustainable food solutions
accelerates, the Climate Bonds Initiative aims to pave the way for increased
investment in sustainable food solutions that directly support climate goals.

“In assessing sustainability in the food system, alternative proteins are one of
the most impactful climate-mitigation solutions,” says
Rosie Wardle, co-founder and Partner
at Synthesis Capital and Member of Climate Bonds’
Alternative Proteins Technical Working Group. “We must catalyze more capital
into this sector to scale up the industry and to ensure the resilience of our
food system, as without these solutions we cannot feed our growing global
population within planetary boundaries. I applaud the Climate Bonds Initiative
for their leadership in establishing this first-of-its-kind framework to empower
the markets to support the further growth of the alternative protein industry.”

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Sustainable Brands Staff

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Published Apr 9, 2025 8am EDT / 5am PDT / 1pm BST / 2pm CEST