Action needed on meat and dairy sector’s rising emissions

The call for urgent climate action within the global food and agriculture sector has never been louder. At the forefront of this movement is FAIRR, a powerful investor network backed by $70 trillion in assets, which is pressing for immediate policy intervention. And with the upcoming COP28 Climate Summit on the horizon, the stakes are high.

Livestock’s hefty carbon footprint

Recent findings reveal a troubling trend: emissions from the world’s largest meat and dairy producers are not just persisting; they’re climbing. In the span of 2022-23, emissions saw a 3.28 per cent increase. This is especially concerning when framed against the backdrop of United Nations data indicating that livestock farming alone accounts for approximately 14.5 per cent of global emissions.

Jeremy Coller, the founder and chair of FAIRR, is emphatic about the “urgent need for more policy focus on the food and agriculture sector”, urging global policymakers to elevate agriculture and food to top-tier concerns at the imminent COP28 UN Climate Summit in Dubai.

The event starts on 30 November, and the UAE has announced that two-thirds of all food served at the summit will be vegetarian or vegan.

Accountability in meat and dairy: The path to net zero

Despite the need for change, it has emerged that only four of the top 20 meat and dairy firms have established net zero emissions goals that have received the green light from the Science Based Targets initiative (SBTi). This is a small fraction considering the influence and size of these producers.

However, incremental progress is visible. The index developed by FAIRR showcases that 40 percent of the top 20 companies now publicly report their Scope 3 value chain emissions. These emissions include not only the direct operations but also the extended impact from supply chains and animal feed production—a substantial contributor to their carbon footprint.

Thalia Vounaki, the senior manager of research and engagements at FAIRR, acknowledges this as a positive step forward, noting that it is “encouraging to see more firms disclosing carbon footprints that encompass their entire supply chain.” She emphasises, however, that the journey toward comprehensive disclosure and aggressive climate action in the meat and dairy sector is far from complete.

Implications for asset managers: A call for engagement and influence

For asset managers, this emerging data presents a dual-edged sword. On one side, it offers a clearer view of where and how emissions are generated, allowing for more informed investment decisions. On the other, it imposes a fiduciary responsibility to influence corporate behaviour toward sustainability. Investors are thus urged to maintain robust engagement with the sector, promoting a narrative that to effectively manage climate risk, comprehensive disclosures are non-negotiable. These disclosures must extend to supply chain emissions and offer detailed inventories that differentiate emissions originating from feed versus those from the animals themselves.

The current discourse within the House of Lords that criticises the UK government’s handling of sustainable food production policy only adds to the global urgency for reform. The perceived missteps in policy at both domestic and international levels highlight the intricate relationship between governance, corporate accountability, and the role of financial stakeholders in shaping a sustainable future.

The road ahead: Navigating to COP28

As COP28 approaches, FAIRR‘s analysis resonates with increasing urgency. It’s a call for the world’s asset managers to leverage their influence, demanding that the food and agriculture sector are placed at the forefront of climate policy discussions.

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