Investor group warns that livestock industry must do more to reduce methane emissions

A group of investors He said the global push to reduce methane emissions and end deforestation runs the risk of being held back by weak efforts by companies in the livestock sector.

More than 100 countries pledged to reduce methane emissions by 30% and to halt and reverse deforestation by 2030 in last month’s climate talks at the COP26. The food agency of the HIM-HER-IT said that livestock accounts for 44% of methane gas emissions caused by economic activity.

Yet less than a fifth of the world’s largest livestock producers don’t even calculate some of their emissions, according to a report by the FAIRR Initiative (FI), whose members manage more than $ 45 trillion in assets.

“As the major driver of methane from human activity and deforestation, the goals set at COP26 placed a large part of the responsibility on the agri-food sector,” said FI President Jeremy Coller.

“However, failures in methane and manure management underscore the growing sense in the market that cows are the new coal,” he said.

In its fourth annual report, the group evaluated 60 publicly listed animal protein producers with a total value of US $ 363 billion, in relation to ten environmental, social and governance aspects, such as emissions and the use of antibiotics. .

Among those scoring highly were Norwegian aquaculture companies Mowi ASA and Grieg Seafood, while the highest rated meat and dairy companies were Maple Leaf, Marfrig and Fonterra, all defined as “low risk”.

Other large producers, such as the world’s largest meat packer, JBS SA and Tyson Foods, for their part, were considered “medium risk”.

JBS lost points for reasons such as its information on animal welfare and employee working conditions, while Tyson was flagged for reasons such as part of its sourcing comes from regions at risk of deforestation, FAIRR said.

JBS said improving its ESG performance remained a priority. In the FAIRR ranking, JBS noted that it was ranked 11th out of 60 companies, with an overall score of 57%, an improvement of six percentage points over 2020.

Tyson said he has engaged with FAIRR and provided reports on his pledges to prevent deforestation, including beginning sourcing of verified deforestation-free beef in late 2021, with the transition complete in late 2025.

FAIRR publishes the results so that other investors can use them when analyzing the performance of companies and in their engagement with the boards.

The report also reveals that 42 of the 45 meat and dairy companies that source soybeans for animal feed in areas at high risk of deforestation, such as the Cerrado region in Brazil, do not have a policy to mitigate deforestation.

According to the report, the livestock industry has also failed to keep track of its overall supply chain, currently overlooking up to 90% of deforestation caused by indirect suppliers.

Almost a third of the cattle bought by JBS in the Brazilian Amazon state of Pará came from ranches with “irregularities” such as illegal deforestation, according to the prosecution’s office in an audit carried out in 2020.

“The science is clear that, to avoid rampant climate change, high-emitting sectors, such as agriculture, must transform in the next decade. However, the latest FAIRR research shows how far the food industry has to go, ”said Eugenie Mathieu, senior analyst at Aviva investors.