Finance & Investment

How to Ensure Alt-Protein Investments Advance Climate Goals

The Climate Bonds Alternative Proteins Criteria offer a first-of-its-kind framework for certifying investments in sustainable protein solutions.

Published 1 week ago | About a 4 minute read

Image: Aleph Farms

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.”