Meat and dairy facing stranded assets

20th July 2022

Eight in 10 believe climate change will have an impact on the meat and dairy sector, slashing profits and leading to stranded assets.

That is according to research from the Changing Markets Foundation (CMF), whose poll of more than 200 investors found that 84% believe a lack of climate mitigation could lead to stranded assets; 61% say it is a “distinct possibility”, while 23% state that the risk is “very likely”.

Three-quarters of respondents are also concerned about climate change affecting the availability and performance of investment products and opportunities in the meat and dairy sector, with two-fifths being “very concerned”.

The more temperatures rise, the less suitable many places become for rearing livestock or growing their feed, while water stress is set to impact the sector’s viability and profitability. Climate scientists believe a decline in livestock of seven to 10% may be necessary to limit global warming to less than 2°C above pre-industrial levels. However, production of red meat and dairy is projected to grow by more than 50% in the next 30 years.

The survey also found that 94% of investors believe it is important for the industry to reduce its methane and carbon emissions, with 39% considering this “critically important”.

Food production is responsible for 37% of greenhouse gas (GHG) emissions and is uniquely dependent on stable climate conditions. Livestock agriculture is also the single largest source of methane, being responsible for around 32% of such emissions.

The CMF recommends that investors support agroecological and regenerative farming practices, and urges investees to develop specific methane action plans and disclose investments into methane and GHG mitigation measures.
Image credit | Shutterstock


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