Climate change is now recognised as a severe global threat. The World Economic Forum’s 2020 Global Risk Report states that climate change is the top global risk in terms of impact.
The Paris Agreement aims to substantially reduce global greenhouse gas emissions to limit global warming to well below 2°C and pursue efforts to limit it to 1.5°C.
However, while other sectors are reducing their emissions fast, the excessive production of factory farmed animals is a major barrier to improvements in agricultural emissions.
Factory farming has a disproportionate impact on the climate
There is consensus that a reduction in animal protein consumption would reduce dietary greenhouse gas emissions (e.g. the 2019 Intergovernmental Panel on Climate Change report, compiled by over 100 experts).
The evidence is clear that meat and dairy do not provide nutrition in an efficient or sustainable way, producing 60% of agriculture’s greenhouse gas emissions. Globally, if health guidelines on meat consumption were followed, greenhouse gas emissions would be two-thirds lower by 2050 compared with current predictions.
Meat and dairy are responsible for 60% of agricultural greenhouse gas emissions
Without fast and large-scale shifts in global meat consumption, agriculture will consume the entire world's carbon budget necessary for keeping global temperature rises under 2°C by 2050.[ii]
Using large amounts of land to grow animal feed for factory-farmed animals limits our ability to mitigate climate change through land-use based solutions.
A 2018 study of over 40,000 farms revealed that even the lowest impact meat and dairy products still cause much more environmental harm than the highest impact vegetable and cereal products. This addresses the misconception that white meat and poultry are not climate culprits.
There are several factors behind this.
First, emissions from feed production are usually larger than emissions from vegetable protein production.
Second, animal feed is responsible for 67% of deforestation for agriculture, resulting in losses of above- and belowground carbon.
Third, animals create additional emissions from enteric fermentation, manure, and aquaculture ponds.
Factory farming reduces our ability to mitigate climate change
We currently use vast amounts of land to grow animal feed crops like soy and corn.
The fast-growth high-yield breeds commonly used in intensive production require carefully calibrated, high-protein feed. But more robust, higher welfare breeds can be fed a much more diverse diet including waste-streams.
By using so much land to grow animal feed rather than store carbon, we are reducing our global mitigation capacity.
All Paris-aligned climate scenarios rely on negative emissions technologies, and many of the climate change mitigation strategies with the greatest potential to reduce global temperature increases are based on land use.
Why does this matter to investors?
Climate change is now recognised as one of the most severe threats to our societies and economies.
Increasing awareness of this issue among policy-makers means there is a shift towards tighter regulation and disclosure rules, both for companies and for financial institutions.
While much of the public debate has focused on the energy industry, UN PRI has already identified agriculture as a sector that will be crucial to this 'inevitable policy response' to climate change.
There is also the risk of reputational damage. As public understanding of the links between intensive animal production and climate change increases, companies who continue to use irresponsible practices and and drive up greenhouse gas emissions face increased scrutiny from civil society and the media and may experience negative campaigns.