Generated Summary
This report, commissioned by the Changing Markets Foundation, analyzes the investment community’s perspective on the meat and dairy industry’s climate impact and its transition towards sustainability. It presents the findings of a survey of 201 respondents from the investment community, which investigated their views on the risks associated with climate change in the meat and dairy sectors and their expectations for companies’ actions to reduce greenhouse gas emissions, particularly methane. The report explores the industry’s current climate footprint, the inadequacy of current global actions to reduce emissions, and the potential impacts of climate change on the sector. Furthermore, it provides insights into the investment community’s recognition of climate risks, its concerns about the pace of mitigation efforts, and the role of financial institutions in driving the necessary changes. The study underscores the urgent need for financial institutions and actors in the finance sector to drive a transformation within the meat and dairy sector to reduce carbon and methane emissions. The aim is to promote more sustainable practices and alternative protein sources to mitigate climate change, and ensure long-term viability of investments and the industry as a whole.
Key Findings & Statistics
- 82% of the investment community agreed that climate change presents a material risk to meat and dairy industry-related investments.
- 84% believe that a lack of mitigation of climate change could lead to stranded assets in the meat and dairy industry.
- 94% think that reducing methane emissions alongside carbon emissions is important.
- 83% think that investors should encourage companies to reduce their methane emissions.
- 55% of respondents think that investors are not sufficiently addressing these risks.
- Global warming is already at 1.1°C, and is on a path to 3°C increase.
- To meet the 1.5°C target, global net zero must be achieved by 2050 at the latest.
- Methane has 82.5 times more warming potential than CO2 over a 20-year period.
- A reduction of 45% of methane emissions by 2030 would avoid nearly 0.3°C of warming by the 2040s.
- Food production is responsible for around 37% of GHG6.
- Livestock agriculture is the single largest source of methane, responsible for around 32% of anthropogenic methane emissions.
- Meat production is projected to expand by 40mt to 366mt by 2029.
- Dairy production is expected to grow by 1.6% per year by 2029.
- EAT-Lancet projects that both red meat and dairy production will increase by over 50% by 2050 compared to 2010 baseline.
- Climate scientists expect a decline in livestock of 7-10% if we were to reach 2°C by 2050.
- Financial losses could range between $9.7 and $12.6 billion if we were to reach 2°C by 2050.
Other Important Findings
- The meat and dairy sector’s current trajectory is inconsistent with the goals of limiting global warming to 1.5°C.
- The report highlights the need for financial institutions to engage with the meat and dairy industry to ensure its transformation.
- Actions for investors include requesting companies to report and reduce methane emissions.
- Financial institutions should support the growth of genuinely sustainable alternative protein and better food production practices.
- The alarming effects of climate change on the sector multiply the more that temperatures increase.
- Negative climate impacts on the sector are already impacting farmers around the globe.
Limitations Noted in the Document
- The document itself does not explicitly detail the limitations of the study methodology, data collection, or sampling methods. It focuses on presenting survey findings and drawing conclusions based on them.
- The analysis is based on the perspectives of the investment community, which may not fully represent the views or experiences of other stakeholders in the meat and dairy sector, such as farmers, consumers, or environmental organizations.
- The report highlights the need for more rapid and substantial reductions in methane emissions.
- The report primarily focuses on the investment community’s views.
Conclusion
The report “Stranded in a vicious cycle? The case for transformation in animal agriculture” underscores the urgent need for a significant transformation within the meat and dairy sector to mitigate climate change. The investment community recognizes the risks posed by climate change to meat and dairy investments, with a majority acknowledging the potential for stranded assets and supporting the reduction of methane emissions. A significant majority of respondents think investors should encourage companies to reduce their methane emissions. The current trajectory of the meat and dairy industry is incompatible with limiting global warming to 1.5°C, emphasizing the inadequacy of current global actions. The report indicates the expansion of meat production, with projections that contrast with climate science. The report provides a clear call to action for financial institutions. By engaging with the meat and dairy industry, and supporting the transition to sustainable practices, financial institutions can help mitigate climate risks. Actions investors can take range from requesting companies to report and reduce methane emissions to supporting the growth of genuinely sustainable alternative protein and better food production practices. The key takeaway is the need for the finance sector to play a critical role in transforming the meat and dairy industry.