Meat suppliers could lose billions of dollars due to the increasing financial costs of climate change and growth in the alternative protein market, suggests modelling by the $20trn FAIRR investor network.
The researchers said companies could expect higher electricity costs due to carbon pricing in a 2°C world, more expensive feed thanks to poor crop yields, and increased livestock mortality due to heat stress. They also forecast alternative proteins such as plant-based burgers would command at least 16% of the current meat market by 2050, rising to 62% based on factors such as technology adoption rates, consumer trends and a carbon tax on meat.
Brazilian firm JBS – the largest meat processing company in the world – could lose up to 45% of earnings before interest, taxes, depreciation and amortisation (EBITDA). However, companies, such as Canada's Maple Leaf, which has invested in plant-based proteins, could see EBITDA rise by 77%.
Despite this, only one in 44 of the world's largest meat companies have undertaken their own climate scenario analysis, compared to at least 23% of oil and gas, mining and utilities companies. “It's not an acceptable strategy when it comes to this level of climate risk for the food industry to bury its head in the sand,“ FAIRR founder Jeremy Coller said.
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