With the global meat industry’s profits increasing during the pandemic and the dairy industry sticking to its marketing playbook, there seems to be little incentive to shake up these sectors.
However, the meat and dairy industries are more vulnerable than they appear. A new report shows that investors are aware of sustainability issues within those sectors’ value chains, and climate change may force the hands of corporations in this space, regardless of their products’ popularity.
The Changing Markets Foundation recently released a report urging investors to step up and take action to address the meat and dairy industries’ contributions to climate change.
Researchers from the Changing Markets Foundation surveyed more than 200 investors. The organization’s goal was to see how the financial sector views the meat and dairy sector’s viability at a time when climate change is now become more of a concern.
More than 80 percent of investors surveyed stated that inaction on climate change could lead to stranded assets and other material risks to investments in the industry. Nearly three-quarters of those surveyed think companies should report their methane emissions alongside other greenhouse gas (GHG) data.
Yet, 55 percent of respondents believe investors are not adequately addressing the risks associated with climate change.
The campaigns director at Changing Markets, Nusa Urbanic, said, "We are currently at a crucial crossroads that will determine the future of food production for decades to come. Despite the majority of investors believing that climate change presents a material risk to meat and dairy industry-related investment, it is concerning that more than half also said that investors are not sufficiently addressing those risks."
Added Urbanic, "The alarming effects on the sector multiply the hotter the planet gets. Farmers across the globe are already feeling the pain and we need rapid action to break this vicious cycle."
According to the Changing Markets report, food production accounts for more than one-third of GHG emissions. A substantial portion of those emissions come from meat and dairy production.
For example: if meat and dairy were replaced with a vegan diet, the data suggest that emissions could drop by as much as 70 percent. That is nearly impossible, however, and to hit goals established by the Intergovernmental Panel on Climate Change (IPCC), all sectors need to reduce their emissions.
But companies that rely on livestock still face huge financial risks. If the world warms by 2 degrees Celsius or more, livestock could experience losses that could total more than $12 billion. Approximately 7 to 10 percent of all livestock would be lost at a global average temperature increase of 2 degrees; but even more worrisome, according to the report’s authors, the world is on track for 3 degree increase in global temperatures by mid-century.
So even if businesses vested in the meat and dairy industry refuse to make any changes, rising temperatures worldwide will eventually make such decisions for them.
The investors that the investors report’s authors surveyed said they seek methane disclosures from companies in the dairy and meat sectors, and livestock (primarily cows) generate about one-third of such emissions. A focus on methane, concludes the report, can help repair the world’s climate much quicker than other GHG emissions as methane is a much more potent greenhouse gas than others such as carbon. To that end, companies can take actionable steps in order to reduce their methane emissions.
Changing Markets’ survey listed four recommendations for investors: report their science-based climate and methane policies; ensure investees have climate action plans with a focus on methane; ask food companies to disclose their investments in meat and dairy alternatives; and support the growth of regenerative farming practices.
While the report focuses on how the investors can turn their beliefs into action, some companies have already begun to lead the way.
One such company is Upfield, which makes a wide range of plant-based food and spreads. The company’s reporting shows that methane alone accounts for 7.5 percent of its GHG inventory. Upfield, with a portfolio that includes brands like Violife, Flora, Country Crock and Bertolli, has acknowledged that dairy products comprise only 1 percent of its ingredients — but that amount accounts for 7 percent of its carbon footprint and 51 percent of its methane emissions.
Ben and Jerry's Project Mootopia, which reduces and reuses methane from cows, is adopting new technologies to follow through on its climate action plan. Among the brand’s goals are to reduce emissions on 15 of its dairy farms to half the industry average by 2024 as well as plans to scale up regenerative agriculture across its supply chain.
In the meat industry, Applegate is adopting regenerative agriculture practices. Within the dairy sector, the same can be said of Danone, which sells a wide range of dairy products. Regenerative farming and other sustainable agricultural practices allow for the restoration of biodiversity — and even offer farmers opportunities to develop new income streams.
While these examples show potential for change within the meat and dairy sectors, many companies in this space still face a long road ahead. As the IPCC has repeatedly stated, GHG reductions are needed in all sectors to hit global climate action goals; and specifically for the meat and dairy industries, methane reductions will require bold action from both investors and businesses.
Image credit: David Mark via Pixabay
Johnathan Smith is a student and environmental sustainability advocate living in Tennessee. His primary passions are better implementation of the Food Recovery Hierarchy and CSR in the food industry. Currently, he spends most of his free-time volunteering with local organizations focused on climate change and hiking with his best friend/dog, Romy.