The $1.5 trillion global meat and dairy industries are taking little responsibility for their roles in climate change even as increased droughts, floods and storms cost them money.

That’s the assessment of Farm Animal Investment Risk & Return, a London-based collaborative investor network, in a report last week. Its Coller FAIRR Protein Producer Index evaluated the 60 largest global meat, dairy, and farmed fish producers on nine “risk and opportunity factors,” including greenhouse gas emissions, deforestation, water use, and pollution. This year, FAIRR added “sustainable proteins” to the list, because “reduced reliance on animal protein sources is key to sustainable development.”

“The 2019 Index demonstrates that the vast majority of companies have yet to meaningfully address even the most basic sustainability risks,” the report said. Of the 60 surveyed, 39 companies, valued at $175 billion and with combined revenues of over $116 billion, are ranked as “worst performers” by the Index.

Factory farming produces more than 14% of the world’s greenhouse gas emissions — a greater percentage than the entire transportation sector — and the livestock industry is the main cause of habitat loss worldwide, according to FAIRR. Yet most producers don’t have plans to reduce emissions; 75% don’t even measure them. None of the companies surveyed have a comprehensive deforestation policy.

  • One-fourth of the companies surveyed have invested in plant-based protein products and technologies. In the past year alone, eight companies introduced plant-based lines or announced plans to do so, and 11 companies announced investments to grow their alternative protein portfolios. Tyson Foods, the largest meat company in the U.S., told the Wall Street Journal its new plant-based line, Raised & Rooted, could bring in $1 billion in sales per year.  
  • Numerous dairy and meat producers are suffering from climate change. The Australian Agriculture Co., the country’s largest beef producer, said earlier this year it lost $72 million due to the effects of floods and drought, Bloomberg reported. South African poultry producer RCL Foods Ltd. warned it could see profits hit by irrigation restrictions linked to droughts.

Karma Takeaway: By refusing to take steps to reduce their environmental footprint, the meat and dairy industries may dig themselves into hole, creating opportunities for rivals including  plant-based protein producers.