We, the undersigned recognise the critical need to reduce the level of greenhouse gases emitted by the global agricultural supply chain if we are to meet the goals of the Paris Agreement.
We are deeply concerned about the risks presented by climate change to regional and global economies and to investment assets in the agriculture sector. At the same time, investors and their representatives recognize the significant investment opportunities that the transition to an emerging net-zero emissions economy presents. We have a fiduciary responsibility that requires us to generate investment returns and protect our assets. At present, in the absence of strong policy action to address GHG emissions associated with the global animal supply chain, protein producers and retailers face significant risks in the transition to a low-carbon economy.
Therefore, we urge all G20 nations to promptly enact ambitious policies and disclose effective targets for GHG reductions in agriculture within or alongside their National Determined Contributions (NDCs) commitments at COP26.
The scope of the problem
The IPCC’s ‘Special Report on Climate Change and Land‘ found that an estimated 23% of total anthropogenic greenhouse gas emissions in the period 2007-2016 came from agriculture, forestry and other land use. Recent research has put this at a third of global GHG emissions.
We currently produce around 340 million tonnes of meat per year, more than three times the quantity of 50 years ago, whilst meat consumption worldwide is expected to increase 1.4% annually through to 2023 with rising incomes and a growing global population. However, this trajectory generates a level of greenhouse gas emissions that is unsustainable. Current production processes to meet this growth in demand is also responsible for record levels of financially material destruction of some of our most important natural biomes on the planet through deforestation and biodiversity loss.
As the Dasgupta Review outlines, our future prosperity is reliant on both the protection and restoration of our natural ecosystems. Therefore, we need to address how to sustainably feed the world’s population in a way that is aligned with environmental targets and climate change goals. Furthermore, with more than 80% of the world’s soybean crop being fed to livestock, there is a link between soft commodities such as soybean used for animal feed and global deforestation. Given the dairy and meat sector’s contribution to global greenhouse gas emissions and forest loss, protein producers are contributors to the problem, but they therefore also have the opportunity to be part of the solution.
Enteric fermentation, a digestive process in cattle and other animals that produces methane as a by-product, accounts for about 4% of all global emissions alone. That’s twice the impact of the global aviation sector. The Coller FAIRR Protein Producer Index shows that 86% of the world’s largest listed meat and dairy producers are failing to declare or set meaningful reduction targets for all greenhouse gas emissions.
The world is taking steps to transition to a net-zero economy. Given its environmental footprint, the global food system and animal agriculture in particular must be a key part of that transition. In addition, the IPCC suggests that beyond tackling animal protein production, increasing the proportion of plant-based food in global diets also has significant GHG-mitigation potential.
Therefore, we, as investors and/or stakeholders in these companies, want to encourage them to shift more rapidly towards a net-zero business model.
The NDCs are the path to a solution
The COP26 process, and each country’s Nationally Determined Contributions (NDCs) in particular, are key to meeting this challenge.
Initial analysis by WWF on the INDCs indicates that 89% (168 out of 189 countries) of countries that have submitted NDCs have included agriculture and/or land-use change and forestry in their climate change commitments. However, the sector is typically addressed as part of a country’s overall economic targets. In fact, there are only a handful of countries that specifically mention agriculture in their sectoral targets. Over 90% of current NDCs fail to account for the whole food system.
November’s COP26 Summit in Glasgow is an opportunity to drive change. Robust policy action will help companies establish effective climate action and will further incentivize private investments in low-carbon, climate solution technologies in the agriculture sector.
Therefore, we ask all G20 nations to disclose specific targets for emissions reduction in agriculture within or alongside their NDC commitments at COP26. We also encourage countries to go further to establish frameworks for a transition to more sustainable diets. National Dietary Guidelines (NDGs) are a key tool as part of those frameworks. In 2019, the EAT Lancet Commission were able to establish the Planetary Health Diet, a global dietary guideline that promotes good human health while remaining within planetary boundaries, and respecting national and cultural differences.
Bold and effective national targets for agricultural emissions enable investors and their representatives to address climate risks and opportunities. Such climate action on food systems has the potential to deliver 20% of the global emissions reductions needed by 2050. We urge G20 governments to seize this opportunity to help build a more transparent, resilient and sustainable global food system.