Forty institutional investors, including Coller Capital, three Swedish state pension funds, Aviva, Nordea and Robeco have launched an engagement with 16 multinational food companies highlighting the material risks posed by industrial animal production. The coalition, which together manages $1.25 trillion in assets, has written to the companies urging them to identify their plans to respond to this risk, in particular by encouraging them to set strategies to diversify into plant-based sources of protein.

The coalition has been brought together by the Farm Animal Investment Risk & Return (FAIRR) initiative and ShareAction who have also  jointly published a briefing which provides an investment case for moving to plant-based production of protein rather than that based on meat consumption. The briefing highlights the environmental, social and public health risks inherent in the unsustainable factory farming of livestock, which FAIRR and ShareAction believe financial markets are not currently valuing appropriately. Among the risks are those associated with climate change - the report states that the livestock sector currently accounts for 14.5% of greenhouse gas emissions which is more than the global transport sector.

The companies targeted in the engagement include Kraft Heinz, Nestle, Unilever, Tesco, Walmart and General Mills. The US food giant General Mills - makers of Häagen Dazs and Yoplait - is highlighted as an example of good practice for supporting startup companies such as Beyond Meat, which is developing foods to substitute meat products with more sustainable plant-based alternatives.

Jeremy Coller, Founder of the FAIRR Initiative and CIO of Coller Capital, said, “The world’s overreliance on factory farmed livestock to feed the growing global demand for protein is a recipe for a financial, social and environmental crisis. Intensive livestock production already has levels of emissions and pollution that are too high, and standards of safety and welfare that are too low. It simply can’t 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.”

Clare Richards, Campaigns Manager at ShareAction said, “The trend for ‘less but better meat’ is creating new opportunities on plates and in portfolios. Evidence suggests that plant-based protein sources are better for your health, your wallet, and the planet. Consumers increasingly recognise these benefits; and now this coalition of forward-thinking investors are doing the same. As a result of this engagement we hope more companies will embrace the opportunities presented by this growing consumer trend.”