Global investors urge fast food giants to accelerate climate action
An investor coalition with $6.5trn (£5trn) in assets under management has today told six of the world’s largest fast food firms to urgently tackle climate and water risks in their supply chains.
The investors sent letters to companies including McDonald’s and Domino’s Pizza, asking them to explain how they intend to de-risk their meat and dairy suppliers by March this year.
They want to see tough targets set to reduce greenhouse gas emissions and water usage, warning that “animal agriculture is the world’s highest-emitting sector without a low-carbon plan”.
Jeremy Coller, founder of the Farm Animal Investment Risk & Return (FAIRR) initiative, which helped facilitate the letters, said the $570bn fast food sector’s environmental impacts had reached “unsustainable levels”.
“To put this in perspective, if cows were a country, it would be the world’s third largest emitter of greenhouse gases,” he continued. “Investors are calling for more strategic and innovative thinking to manage these risks.”
More than 80 investors sent letters to the owners of Domino’s Pizza, McDonald’s, Burger King, Chipotle Mexican Grill, Wendy’s, KFC and Pizza Hut.
They called on the fast food giants to adopt a requirement for suppliers of animal protein products to report and reduce greenhouse gas emissions and freshwater impacts.
The coalition also wants them to publish quantitative, time-bound targets to reduce emissions and freshwater impacts in their own supply chains, and to publicly disclose progress annually.
In addition, the group urged the companies to undertake a scenario analysis in line with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The FAIRR initiative estimates that the agriculture sector could contribute around 70% of total allowable greenhouse gas emissions by 2050, with livestock set to use around 10% of annual global water flows.
“When it comes to evaluating market risk, rising global temperatures and intensifying competition for water access are increasingly material factors for investors,” said Eugenie Mathieu, senior SRI analyst at Aviva Investors.
“From field to fork, investors want to understand which food companies are monitoring and minimising the long-term environmental risks in their supply chain.”
Chris Seekings is a reporter for TRANSFORM