Plant-based profits: investment risks and opportunities in sustainable food systems
A report from Farm Animal Investment Risk and Return (FAIRR), an investor initiative focused on the environmental, social and ethical issues of factory farming, outlines the drivers of demand for sustainable protein, how investors and companies are responding and how FAIRR has engaged with 16 global food companies.
The report finds that some of the main trends in the sustainable protein market are: a strong trend towards plant-based eating and flexitarian diets; health concerns over red meat; heavy investment in alternative protein sources including plant-based, fermented and cell-cultured options; investors wanting to decarbonise their portfolios; concerns over pollution and antibiotic resistance associated with livestock rearing; and increasing regulation of environmental and health impacts.
Some investors are joining collaborative engagements such as FAIRR or engaging individually with companies on the issue of sustainable protein. Food companies, meanwhile, are broadening their alternative protein portfolios through acquisitions, venture investments and development of new products.
FAIRR found that, out of 16 companies that they engaged with on the issue of sustainable protein, only 6 had targets to reduce emissions from agriculture and few recognised the importance of diversifying protein supply for sustainability reasons. However, all offer own-brand products that replace meat or dairy, in response to increased consumer demand.
While some of the food system challenges facing humanity are local, in an interconnected world, adopting a global perspective is essential. Many environmental issues, such as climate change, need supranational commitments and action to be addressed effectively. Due to ever increasing global trade flows, prices of commodities are connected through space; a drought in Romania may thus increase the price of wheat in Zimbabwe.
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