You don’t have to be an animal rights activist to think there’s long been something seriously wrong with how we produce our food.
For one thing, it’s obvious that we rely far too much on factory farming – which as the biggest user of fresh water, the largest consumer of antibiotics and the source of more greenhouse gas emissions than every car, plane, boat and train in the world put together, is simply not a sustainable way of feeding our planet.
As someone who has spent their whole professional life in finance, I’ve also found myself struggling to get past how inefficient much animal agriculture is. Feeding 25 calories to a cow to produce one calorie of beef is certainly not the kind of return I’d find acceptable at the private equity firm I founded.
And after making a whole career out of picking smart investments, about 10 years ago, I realised that the institutions putting their money into intensive animal agriculture were not aware of the ever-increasing risks inherent in the industry. It may have seemed like a safe bet – people will always need food, after all – but if you looked close enough, the reality was very different. Investors just didn’t know it.
Which led me to an idea. Why not fill that knowledge gap by giving investors the kind of reliable, objective data they need to make better-informed decisions? By focussing on the material risks of investing in factory farming rather than the moral arguments against it, we could leverage the awesome power of capital markets to drive change, do things better, and build a more sustainable global food system, one that works for all of us.
And so FAIRR, Farm Animal Investment Risk and Return, was born. By researching, analysing and distributing information around the very real business risks associated with issues such as climate change, pollution, nature and biodiversity loss and antimicrobial resistance, FAIRR empowers investors to engage as shareholders with companies in the global food supply chain – from protein producers to high street retailers.
Importantly, FAIRR doesn’t tell its members what they should and should not invest in, or churn out reports that make ideological points – it simply provides investors with the kind of solid, reliable data on which they rely to make decisions in every other sector.
And that data speaks for itself. For a decade now, FAIRR’s analysis has shown that industrialised animal agriculture is anything but a safe bet. Investors in the industry can now see that their capital is at risk from any number of sources: higher taxes, class action lawsuits, reputational damage, regulatory interventions and more.
To say there has been an incredible appetite for FAIRR’s work would be an understatement. FAIRR has consistently been the fastest growing investor network, attracting members from around the world, asset managers and asset owners alike, representing more than US$80 trillion of AUM.
As you can see in detail throughout this report, that success has been sustained throughout FAIRR’s first decade. And it’s only just getting started. For all the wins we’ve witnessed since 2015, much work remains to be done to mitigate material financial risks and capture exciting new food and agri-tech opportunities as we transition to a more resilient and sustainable food system – work we’re going to keep on doing for many more decades to come.
FAIRR has achieved so much with its members over the past 10 years, and I know the next 10 will bring even greater change – for our food, for our planet, and for investors all around the world.
FAIRR insights are written by FAIRR team members and occasionally co-authored with guest contributors. The authors write in their individual capacity and do not necessarily represent the FAIRR view.