AP funds, Nordea, Folksam take aim at food companies on meat risk

A group of 39 institutional investors including Swedish buffer pension funds AP2, AP3 and AP4, along with Nordic banking group and Swedish pensions and insurance provider Folksam, has linked up to urge 16 multinational food companies to say how they plan to deal with the risks of industrial animal production.

The coalition of investors, whose members manage some $1.25trn (€1.11trn) in assets, has been brought together by Farm Animal Investment Risk & Return initiative (FAIRR) and responsible investment organisation ShareAction.

Jeremy Coller, founder of FAIRR and CIO at Coller Capital – one of the investors in the group – said: “The world’s over-reliance on factory-farmed livestock to feed the growing global demand for protein is a recipe for a financial, social and environmental crisis.”

He said intensive livestock production already had levels of emissions and pollution that were much too high, and standards of safety and welfare that were much too low.

He argued that the industry could not cope with the projected increase in global protein demand.

“Investors want to know if major food companies have a strategy to avoid this protein bubble and to profit from a plant-based protein market set to grow by 8.4% annually over the next five years,” Coller said.

The investors are writing to the companies, urging them to identify their plans to respond to “the material risks posed by industrial animal production”, in particular by encouraging them to set strategies to diversify into plant-based protein sources.

Other investors signing the letters include Australian Ethical, Aviva Investors, Impax Asset Management, Robeco Asset Management and Walden Asset Management.

The companies being targeted by the investors include Kraft Heinz, Nestlé, Unilever, Sainsbury’s, Tesco, Walmart and General Mills.

FAIRR and ShareAction said General Mills was being highlighted as an example of good practice because of its behaviour in supporting start-up companies such as Beyond Meat, which is developing more sustainable plant-based alternatives to meat.

They said the investors were responding to a recent study carried out at Oxford University saying a reduced reliance on meat in diets around the world could lead to healthcare-related savings and avoided climate damages of $1.5trn by 2050.

The study also pointed out regulatory trends as drivers for corporate action, including Denmark’s consultation on introducing a red meat tax and the Chinese government’s plan to lower peoples’ meat consumption by 50%, FAIRR and ShareAction said.