Making the Argument
The FAIRR Initiative was founded five years ago with the intention of providing insightful and impactful data on the risks associated with intensive animal agriculture. In 2016, Jeremy Coller built an ESG network to show investors what many were missing; that, unlike energy and transport, there is an ESG blind spot when it comes to one of the world’s largest sectors – food. That is why FAIRR has been working to close this knowledge gap, helping to safeguard investor returns and guide the transition towards a sustainable global food system.
In its landmark 2016 report, FAIRR identified 28 ESG issues that affect production and pricing, market access, corporate reputation, and legal and regulatory action for companies across the food and agriculture value chain. Our research and engagements have evolved to address current industry issues, from engaging meatpacking companies on working conditions to urging global food giants to diversify their protein sources. Now the world’s fastest-growing ESG network, the FAIRR Initiative continues to make its mark, working closely with investors to change the conversation around animal agriculture and transform the way that food is produced.
We Are FAIRR!
Since 2016, the FAIRR Initiative has been helping to drive change in the animal agriculture sector. Working closely with investors, we produce and analyse data from the world’s largest protein producers and manufacturers to help minimise risks and maximise profits. By providing investors with the tools necessary to address the most material issues, including climate change, deforestation and water scarcity, we are working to shape the future of finance and the global food system.
We are FAIRR and we are changing the conversation.
Environmental Issues
The world is consuming ever more animal protein. Global meat consumption has increased by around 75% since 1990. In the next ten years, demand is expected to rise by another 13%, and in 2050 by 80%. Such booming growth attracts investors, but the industry is also facing some rapidly intensifying environmental threats.
Meeting future demand for meat, fish and dairy products will require an unsustainable amount of freshwater and land, and release toxic quantities of greenhouse gas (GHG) emissions. Livestock and fish production consumes 83% of global arable land, yet provides just 37% of the world’s protein and 18% of global calorie consumption. One report estimated that 70% of deforested land in the Amazon basin can be attributed to the beef industry. Once a crucial carbon sink, global forests have been cut down at such an alarming pace that they are now a net contributor to GHG emissions.
Learn more about what FAIRR is doing to address these issues:
Social Issues
Intensive animal agriculture contributes to numerous public health issues and poses a serious risk to the lives, livelihoods and health of workers, communities and consumers around the world.
The COVID-19 pandemic has exposed the hazardous working conditions faced by those in the meat-processing industry. Livestock workers and their communities face up to 75% higher COVID-19 contagion rates and up to 50% more deaths. However, this was an issue long before the pandemic and there is a clear need to urgently strengthen labour standards and corporate practices among animal protein producers.
Antimicrobial resistance is another rapidly growing threat. Around 70% of medically important antibiotics produced in the US are used in livestock production. The widespread use of antibiotics is catalysing the emergence of antibiotic-resistant bacteria, which threaten the effectiveness of antibiotics in human medicine. A UK government review found that antibiotic resistance could cause 10 million deaths a year and cost the world up to $100 trillion in lost output between now and 2050.
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Governance Issues
Governance is essential to evaluating the effectiveness and resilience of a company’s management and board-level oversight. Poor governance and oversight can directly result in poor management of social and environmental issues in operations. The COVID-19 pandemic has shed a light on the material failings in this area and like working conditions, poor governance on social issues ultimately led many meatpacking operations around the world to grind to a halt.
National and international policy plays a significant role in determining how regulation impacts protein producers and the degree to which environmental, social, and governance issues are reflected in current policy developments. If not properly anticipated, regulatory changes will lead to major material risks to companies and investors.
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What Does This Mean for Investors?
Although the animal protein industry has seen rapid growth over the past half-century and expects to continue growing in the short term, natural resource constraints may dampen expansion in the long term. The factory farming industry releases more GHG emissions than every car on the planet combined, and in 2020, a study revealed that 34% of all global anthropogenic GHG emissions are produced in our food systems. Factory farming is threatening our climate and putting our food security at risk. It is a trillion-dollar industry with a trillion-dollar problem.
A 2021 report suggests that, as the market for protein alternatives grows, we are likely to see a decline in animal protein consumption. Undoubtedly, the rapid growth of the alternative protein industry poses a challenge to meat, fish and dairy producers. This change, however, also represents a key area of potential new market growth to both investors and food companies alike.
FAIRR conducts research and analyses data on the world’s largest food companies and protein producers. Using FAIRR’s data, investors can make informed decisions that help them minimise material risks and maximise opportunities for long-term, sustainable growth.