Report Overview
Livestock production is a significant contributor to the world crossing the safe operating space for the planetary boundaries. The negative feedback loops of exceeding planetary boundaries have already resulted in a range of environmental and financially material impacts for the livestock sector and the agri-food value chain. According to the Global Consultation Report of the Food and Land Use Coalition (FOLU) published in 2018, climate-related risks of the food system were valued at around USD $1.5 trillion, and this is even higher for nature at USD $1.7 trillion. Livestock production is a significant contributor to these risks, and the impacts are compounded by the interconnectedness between climate and nature. Understanding the nature of this interconnectedness is critical when designing sustainability strategies and transition plans for climate and nature.
Given the climate and nature-related risks associated with livestock production, investors with exposure to animal protein companies will face financial implications unless they take necessary action. As shareholders and debtholders, investors play a key role in helping to reform current production systems to protect and ensure long-term value creation. Climate and nature solutions will play a major part in aligning investor portfolios with a net zero and nature-positive future. However, investors do not have a thorough understanding of which solutions to prioritise and fund given the range of solutions and their varying mitigation potentials, costs and feasibility. This has led to relatively limited engagement by investors with portfolio companies and subsequent low investments in climate and nature-based solutions.
This report provides a list of solutions to mitigate environmental impacts from livestock production, incorporating the interdependencies between climate and nature. Understanding the solutions, their mitigation potential, interdependencies, costs, and feasibility of implementation can help investors reduce financial risk, better engage with their portfolio companies to embed promising solutions and allocate necessary capital to scale up solutions to drive the transition towards a net-zero and nature-positive future.
Report Highlights
Some key takeaways from the report are as follows:
Livestock production is a major contributor to the world exceeding the planetary boundaries, leading to significant financial risks.
Opportunities and risks within climate and nature are interconnected and must be tackled simultaneously.
Nature-based solutions are integral to meeting both climate and nature commitments.
Investment in solutions remains low, and promising nature-based solutions that can address both climate and nature risks are underfunded and underutilised.
