‘Pivotal Moment’: Green Bonds Group Launches First-Ever Climate Finance Tool for Alternative Proteins

The Climate Bonds Initiative, whose certification programme helps mobilise finance for climate solutions, has introduced a criterion dedicated to unlocking alternative protein investment.

There’s no two ways about it: we need to change the way we eat, and we need to start with meat.

Farming animals takes up way too much land, water, and resources than we can afford to use, all while producing 57% of the food system’s emissions. In fact, livestock agriculture is responsible for as much as a fifth of all global emissions – that’s 10 times higher than the greenhouse gases produced by the aviation industry.

Despite the large amount of resources and pollution associated with meat and dairy production, these foods only provide 17% of the world’s calories and 38% of its protein supply. Global meat consumption is set to grow by 50% by mid-century, but we’re running out of land to meet that need.

We need new ways to produce meat, which is where alternative proteins come in. Scientists agree that plant-based options are the “best available foods” for planetary health, considering that the world breached its 1.5°C temperature threshold in 2024, and without immediate and tangible action, even keeping post-industrial warming under 2°C feels like a pipe dream.

While traditional plant proteins and novel alternatives might be the best way forward, investors don’t necessarily believe so anymore. The industry has taken several funding hits since the highs of 2021. Last year, financing for startups in the sector dropped by 27%, following a 44% dip the year before.

It is critical that this industry develops further to scale up production and drive down costs, which is why the Climate Bonds Initiative (CBI) has launched its Alternative Protein Criteria to mobilise capital for these future foods.

“It is essential that any investment aiming to address climate change and environmental integrity consider alternative proteins,” the non-profit says.

“The alternative protein market is poised for rapid growth – with global protein demand expected to double by 2050, the need has never been greater. And yet clarity on how to achieve the greatest return on investment for the global protein market has been elusive to date,” Joanna Trewern, director of partnerships and institutional engagement at ProVeg International, tells Green Queen.

“The newly launched CBI criteria is a comprehensive tool for certifying investments into alternative proteins, capturing everything from tofu to fungi and cultivated meat and seafood. Beyond protein type, it provides guidance on the most impactful strategies to scale the alternative protein market, including retail marketing, sustainable sourcing, and replacement and substitution,” she adds.

“This is vital information for start-ups and investors operating in the alternative protein space. This valuable tool brings clarity at a critical time for the sector and will help increase investor confidence and drive investment into the most impactful areas.”

What’s the focus of the Alternative Proteins Criteria?

Climate bonds are financial instruments designed to raise capital for low-carbon projects to advance the green economy – think solar power, electric vehicles, and mass transit. They can be issued by governments, organisations like the World Bank, universities, and even corporations.

CBI describes itself as the leading organisation mobilising global capital for climate action. It aims to drive the growth of the green and sustainable debt market through science-based frameworks, including the Climate Bonds Standard (CBS), which allows investors to assess the climate credentials and environmental integrity of bonds and other green debt products.

The new Alternative Proteins criteria are said to be the first tool for certifying investments in sustainable proteins, and follow two months of public consultations. They highlight key areas for climate mitigation: scaling up production of foods like plant-based, fermentation-derived, cultivated, and blended proteins, encouraging meat substitution, and improving manufacturing processes and sourcing.

Designed to provide procurement guidelines to align alternative protein production with a 1.5°C transition and enable stakeholders to issue credible green finance, the criteria focus on two main areas.

The first is replacing some of the production and consumption of animal proteins with lower-impact alternatives – swapping beef would provide the biggest gains here. The second involves mitigating the impact of alternative proteins themselves, with a focus on energy source and use, raw materials, and waste management.

CBI notes that most of the emissions for alternative proteins relate to energy use, so a switch to renewable energy is “significantly more effective” in attaining the potential emission reductions.

“In assessing sustainability in the food system, alternative proteins are one of the most impactful climate mitigation solutions,” said Rosie Wardle, co-founder of Synthesis Capital and a member of the framework’s technical working group.

“We must catalyse 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.”

The eligible measures for alternative protein stakeholders

The criteria will focus on climate and land use impacts, and will be informed by other standards in the market and recent policy developments. They’re applicable to various financial instruments, including use of proceeds (UoP) for green bonds and sustainability-linked debt.

CBI’s framework only covers alternative protein sources intended for human consumption, so animal feed, pet food, and non-food applications are not eligible. It spotlights hybrid and blended products too, which combine different alternative proteins with each other or with animal-derived sources, with the latter needing to replace at least 60% of animal ingredients.

The Alternative Proteins Criteria targets producers, distributors, retailers and foodservice providers alike. In its list of eligible measures that companies could use for UoP certification, it mentions product and menu reformulation, chef and food prep staff training, and sensory tasting to increase the uptake of alternative proteins for foodservice and own-label retail brands.

Running cross-product discounts on alternative protein dishes and promotions like Meatless Mondays, matching the price of animal-free options with meat and dairy, recommending foods like beans in heart-healthy pamphlets in hospital canteens, redesigning stores to nudge consumers towards more sustainable foods are also among other measures eligible for UoP certification.

The criteria incorporate safeguards for other issues like water pollution, animal welfare, and nutrition. Crucially, CBI states that cultivated meat companies must move away from fetal bovine serum by 2030 – a shift already being seen across the industry.

Didier Toubia, co-founder and CEO of cultivated meat company Aleph Farms, and a member of the criteria’s industrial working group, called it “a timely and essential step towards aligning capital with food systems initiatives that serve both people and the planet”.

“This initiative marks a pivotal moment for sustainable finance. It empowers new investors to join a transformation already embraced by over a third of the global population identifying as flexitarians,” he says.

“It helps unlock critical funding to scale up new protein production systems like cultivated meat, transforming how we feed the world by reducing emissions, land use, and biodiversity loss, while ushering in a new era of culinary innovation and experiences.”