Yesterday, I posted on the meat and dairy industries’ current rate of growth. The UN Food and Agriculture Organization (FAO) Food Outlook report published in June suggests a very small pullback in their current sales.
They attribute it, in part, to:
the lingering effects of droughts
COVID-19 related market disruptions, such restaurant and meat-packing plant closures
The first two on the list are connected to meat-, poultry- and/or dairy-production practices and environmental impact. And the third isn’t likely to improve much until COVID recedes enough to restore widespread confidence among restaurant-goers.
Usually, when an industry begins showing signs of pullback, investors are the first to jump ship. So I took a look at those who have major financial stakes in the future animal agriculture.
Last week, a Financial Times report stated:
“With rising awareness of the carbon impact of the food system, which the UN Intergovernmental Panel on Climate Change estimates accounts for up to 37 per cent of global emissions, investors are starting to take note.”
The article included a chart showing the industries’ biggest investors. Blackrock, Capital Group and Vanguard held the top three positions.
Credit Agricole, listed as the fourteenth largest, said they do not currently see a risk in this sector. The firm also acknowledged they might reduce their investment if consumer trends – including the switch towards plant-based proteins – continue.
On the other hand, Nordea Asset Management (not on the list) actually announced this summer that it would divest holdings in Brazil JBS, “… the world’s largest meat company by processing volume.”They named “environmental” issues as one reason for their divestment.
My take? We haven’t made a major dent in our meat dependency yet, but some of the industry’s big backers are keeping an eye on the trends. At least one has even acted on them.
Financial Times writer Emiko Terazono goes on to address the critical issue of deforestation, “… is often driven by livestock demand and has a huge direct carbon impact,” and warns, “Data suggests deforestation has increased more than 50% during the pandemic.”
The problem of our addiction to animal-based foods is beyond serious! When will more investors move beyond just “keeping an eye on” the problem?
When will they, as Emiko puts it, “… start adjusting food and agricultural company valuations to account for the damage climate change will do to soil quality, biodiversity and water degradation?”
And Feedback’s Executive Director Carina Millstone joins her in calling for just this type of action:
“If [banks and investors] want to take their climate change responsibilities seriously then they can’t continue to support livestock and dairy businesses.”