skip to primary navigationskip to content

Financial disclosure of meat

April 2020: Most meat companies have limited disclosure of climate-related risks and show limited progress in developing climate risk mitigation or adaptation strategies. A new analysis tool for the meat industry aims to support the financial disclosure of climate risks and opportunities for meat companies in a 2oC warming scenario.

Information

The majority of companies producing meat have limited disclosure of climate-related risks according to global asset managers. Recently, consumption and production of meat has experienced increased scrutiny and has been characterised as a sizeable contributor to climate change. According to the IPCC, agriculture, land use and food manufacturing account for 25-30% of total GHG emissions and accelerate deforestation. It coincides with increasing pressure for companies to calculate their climate change exposure risks and develop mitigation strategies and to disclose this in line with standards such  promoted by the Task Force on Climate-related Financial Disclosures (TCFD). FAIRR has released a new analysis tool for the meat industry based on TCFD standards which supports the analysis of climate-related risks and opportunities for meat companies in a 2oC warming scenario. 

Implications and opportunities

Meat producing companies are experiencing heightened pressure to address climate risk. Failure to do so may result in investment funds divesting from carbon-intensive food and meat companies akin to trends in  the fossil fuel industry. In addition, mitigation risks could include evolving consumer attitudes and shifts towards plant-based diets which could outpace the industry’s capacity to adapt, increased regulation in livestock rearing, environmental-linked taxes, stricter emissions policies and increased cost of capital. Other adaption risks could include increased costs and operational damage due to water shortages, environmental degradation and effects of rising temperatures such as heat induced mortality of livestock, or increased animal feed costs due to poor crop yields. FAIRR recommends a reduction of climate risk exposure via reducing reliance on carbon intensive proteins or feed (beef and poultry) and an increased market shares in alternative proteins, such as plant-based proteins and resilient feed crops.

Limitations

The analysis tool is a theoretical framework and further research will be required to test the tool’s practical applicability. All results should be seen within the framework’s methodological and data limitations.


Sources

FAIRR (2020). New financial modelling on climate shows billions of dollars at risk in the meat sector. Retrieved from: https://www.fairr.org/article/new-financial-modelling-on-climate-shows-billions-of-dollars-at-risk-in-the-meat-sector/

Terazono, E., (2020). Meat companies must do more over climate risks, says investors. Retrieved from https://www.ft.com/content/101c7334-63aa-11ea-a6cd-df28cc3c6a68

 

Share this

RSS Feed Latest news

Manulife Investment Management becomes newest member of CISL’s Investment Leaders Group

Oct 09, 2020

9 October 2020 – Manulife Investment Management is the latest organisation to join the Investment Leaders Group (ILG), a voluntary member initiative striving to create an investment chain that prioritises economic, social and environmental sustainability. The ILG is convened by the University of Cambridge Institute for Sustainability Leadership (CISL).

View all news

Contact

Adele Wiliams

| T: +44 (0)1223 768451

Disclaimer

The views expressed in these external research papers are those of the authors and do not represent an official position of CISL, the University of Cambridge, or any of its individual business partners or clients.