Report: The climate crisis demands that the meat and dairy industry innovate urgently towards plant-based products.

This is the headline finding A new report from FAIRR, an investor network. Published on Tuesday (3 May), the report takes the findings of the Intergovernmental Panel on Climate Change’s (IPCC) latest reports on Climate adaptation mitigationThese principles are applied to the global livestock- and dairy sector.

The reports were published in February 2022 and April 20, 2022, respectively. They emphasize the need for large-scale, coordinated global efforts to increase climate resilience and reduce emissions. This includes accelerating the transition from fossil fuels and reshaping the systems of natural resource extraction including agriculture and forest. Without these changes, at least one-third of the global population will face an ‘unliveable’ future by 2050. 

FAIRR’s report states that, in a business-as-usual scenario, the global beef production sector will lose $38bn of value by 2050. The dairy sector will also suffer losses of $22bn.

The decrease in land suitable for these sectors is a major reason for these losses. According to the report, 10% of land that is currently suitable for animal agriculture will become unsuitable for crops by 2050 under most warming scenarios. This will have a negative impact on the feed supply chains and end-user farms.

Cows and other animals will also be at greater risk of death from heat stress and dehydration – particularly in Australia and South America. FAIRR estimates that, in 2021, the US’s dairy industry alone recorded revenue losses of at least $897m due to heat stress. The cost for the US’s beef industry stood at $389m. Poor nutrition and heat stress are also factors that lead to higher rates infertility in animals such as cows and pigs.

The implementation of new policies in the country and at the regional level that support long term net-zero ambitions is another driver of losses. These include carbon taxes. FAIRR believes that corporations are better prepared to deal with these impacts than they are for the physical effects of the climate crisis. 

The IPCC’s mitigation report stated that “realising the full mitigation potential from the food system requires change at all stages from producer to consumer and waste management.”

FAIRR’s report highlights this conclusion but, given the coalition’s focus on engaging investors with food companies, emphasises the need for these companies to diversify their portfolios and invest in alternative proteins. This work must be done alongside processes to improve climate resilience of dairy and livestock farms, reduce their emissions, and as they downsize.

The IPCC’s April report revealed that behavioural changes were responsible at least 40% for the reductions in greenhouse gas emissions in all scenarios in which concerted efforts were made to reduce greenhouse gases emissions. Behavioural changes include switching to low-carbon heating or cooling at home, changing diets, and switching to low-carbon active and passive transport.

On diets, the report stated that “diets high in plant protein and low in meat, in particular red meat, are associated with lower GHG emissions. Emerging food-chain technologies such as microbial, plant, or insect-based protein promise substantial reductions in direct GHG emissions from food production”. FAIRR urges meat and dairy companies, including those in the meat and dairy industry, to think carefully about reducing conventional production and moving to more diverse portfolios that include novel plant-based and insect based proteins.

FAIRR conducted research in 2020 found that 40% of the world’s largest food producers and retailers have introduced dedicated teams of staff for plant-based foods.

FAIRR also encourages protein producers and processors to better assess their climate-related financial opportunities and risks, and to disclose that information. The most recent Coller FAIRR Protein Producer Index found that just seven of the world’s 60 biggest protein producers have reported their climate-related financial impacts.

FAIRR’s executive director Maria Lettini said: “Investors are already well aware of the regulatory and financial risks facing the livestock sector when it comes to climate…. The science now shows that there is also a physical risk.

“Investors will be concerned that the global animal agriculture sector could face an Apollo-13 moment – a near disaster that will take urgent innovation to survive – as the low-carbon transition forces investors to shift capital.”