Who’s Investing In Meat And Dairy Companies?
In recent years, investors have claimed to become more concerned about the climate effects of their investments. The food system generates about a quarter of greenhouse gas emissions, but investors continue to sink money into meat and dairy companies that produce a disproportionate number of these emissions. From 2015 to 2020, meat and dairy companies received $478 billion from over 2,500 global pension funds, banks, and investment firms.
This report digs into the data around big meat and dairy and their key investors. In April 2020, 3,000 investors had $228 billion in funds in the thirty-five largest meat and dairy companies. The top three shareholders in meat and dairy companies are Blackrock, Capital Group, and Vanguard. These three companies are so large that even though meat and dairy companies make up less than 1% of their assets, they are still the primary shareholders.
Investors are also involved in meat and dairy companies in other ways. For example, Blackrock, Vanguard, and Allianz are the biggest bondholders for meat and dairy. Two hundred banks loaned $167 billion to the world’s largest meat and dairy companies in 2020. Banks headquartered in the U.S., France, and the U.K. provided over half of these loans. The largest creditors are BNP Paribas, Barclays, and JPMorgan Chase.
One specific example of the problems associated with investing in harmful agriculture practices involves deforestation in Brazil. In 2019, 244 investors signed on to the “Investor statement on deforestation and forest fires in the Amazon.” However, only seven of those investors had policies on deforestation at the time of signing. Even investors with policies on deforestation often ignore their policies. For example, HSBC invested in Brazilian beef companies, which goes against its policy not to invest in companies that deforest the Amazon. Some investors are beginning to talk about sanctions and divestment away from harmful Brazilian meat, grain, and oilseed companies. However, they typically focus on pushing Brazilian agriculture companies toward developing policies and targets that are easy to ignore. In other words, investors don’t require Brazilian companies to take concrete steps to prevent deforestation (or demonstrate progress).
Another problematic example is U.K. banks investing in U.S. chicken companies. In the U.S., chicken meat is disinfected by washing it in chlorine, a practice that is banned in the United Kingdom. Consumers in the U.K. want to continue to ban chlorine-washed chicken. However, banks in the U.K. have provided $12 billion of loans and underwriting to U.S. chicken companies. Thirty-six investors in the U.K. have $1.1 billion in shares in major U.S. chicken companies.
Some investors justify their involvement in meat and dairy companies by saying that they’re engaging with the companies to reduce emissions. However, only six of the 35 largest meat and dairy companies have emissions targets that include all emissions related to their businesses. These large companies are likely to miss their “zero deforestation” commitments. Investors may not be having a positive effect, either, as they are most likely to ask for more reporting, not for concrete plans to decrease emissions and deforestation. In 2019, lenders didn’t issue any “green” loans to livestock companies, which would require greenhouse gas emissions targets. One beef company was issued a “transition bond” to help it reduce its emissions, but environmentalists criticized the bond as it allowed the beef company to continue its most environmentally harmful practices.
In general, finance doesn’t seem to be thinking about meat and dairy. None of the largest providers of investment and credit to large meat and dairy companies have any sort of policy related to agriculture’s effects on the environment. Only three of the 75 largest asset managers have mentioned agriculture as an opportunity for sustainable investment. Even fourteen members of the Net-Zero Asset Owners Alliance — a group committed to reaching net-zero emissions by 2050 — have heavily invested in meat and dairy.
As financial institutions continue to give billions of dollars to companies that pose risks to human health, workers’ rights, environmental sustainability, and animal protection, it’s important for animal advocates to be aware of the biggest culprits. Public campaigns calling attention to hypocritical investment practices may encourage more transparency and responsibility in the financial sector. It’s important to hold financial institutions accountable for what they claim to want for society versus their actions.