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‘Natural Capital’: The Dangers of Anthropocentrism in the Meat Industry

Disclaimer: The views expressed are that of the individual author. All rights are reserved to the original authors of the materials consulted, which are identified in the footnotes below.

By Harry Mercer


Humans have been eating animals for thousands of years. In the post-war era, industrialisation and higher disposable incomes in developed nations boosted meat consumption. But in less than two decades the threat of environmental damage has shone the spotlight on those investing in the industry. As the effects of the earth’s warming temperatures have become more pronounced, climate change campaigners and investors are accelerating a growing demand for environmental improvements. However, major investors in the meat industry like UBS and Crédit Agricole are failing to put the planet before profit.

Whilst boasting a 1.4trn dollar global market, the animal meat industry is not efficient. It’s a burden on the environment and is more segmented than other types of food systems, using an excessive multiplicity of resources to produce its product. Alone, animal agriculture accounts for 11% of global greenhouse gas emissions, with this figure increasing to 37% when global supply chains, packaging, and food waste are taken into account. Further, with the agricultural sector consuming 70% of the world’s freshwater and occupying almost 40% of global landmass, expected population growth renders this kind of resource consumption as increasingly untenable.

The case against meat has continued with research published by the WHO, recommending a diet high in plant-based food and low on animal protein as a way to help the environment and human health, a view backed by the IPCC. At a time when many governments are committing to net-zero emissions by 2050 and the US is set to re-join the Paris Climate Agreement, the pressure on investors is only going to increase, environmental experts say.

In turn, investors will need to start adjusting food and agricultural company valuations to account for the damage climate change will do to soil quality, biodiversity, and water degradation, according to Matthew McLuckie, research director of Planet Tracker, a group that studies how capital markets should incorporate environmental risks. “Unlike political risk and currency risk, companies are not reporting against ‘natural capital’ risk,” he said.

An example of a company accounting for environmental risk is Arisaig Partners, an emerging markets investor that divested from dairy companies in Asia this year after assessing the future impact of carbon pricing – a tool used by many governments to help meet the Paris goals on emissions reductions. Its data suggested that operating profits at the average dairy company would be halved if it had to pay a carbon price, with some ceasing to make a profit.

However, some investment companies refuse to look past the economics of agriculture in solving the climate issue. UBS, for example, merely acknowledged an “increased investment risk” in the meat and dairy sectors in response to criticism of climate threats. They then noted that a growing global middle-class population meant “overall demand for meat will continue to increase.” Similarly, Crédit Agricole opined that they had “not observed any increase in the risks we bear in this sector,” adding that they had “no strategy to reduce our agricultural commitments.”

The absence of acknowledgement for natural capital from these firms has caused great controversy, with environmental activists demanding worldwide divestment from the sector for the sake of planetary health, claiming that if investors want to take their climate change responsibilities seriously then they can’t continue to support livestock and dairy businesses.

We’re never going to be able to eliminate meat from global diets. However, I strongly believe there has to be a certain acceptance that we have to cut back on the amount that we eat, just as investors and those in power have to recognise that the destruction of ‘natural capital’ is an issue that even money can’t fix. In turn, stakeholders have to eliminate their anthropocentric view of the industry and recognise this as an issue that goes beyond economic markets.

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