Erste Asset Management

Meat as a driver of climate change

Meat as a driver of climate change
Meat as a driver of climate change
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I am writing these lines while hundreds of firemen have been fighting a fire in the North-East Spanish province of Tarragona for more than three days. The fire has already ravaged 6,500 hectares of land. Impressive, but what does that have to do with meat?

The fire was set off by the chickens of a local chicken farm. The chicken manure had started to ferment under the current heatwave and caught fire.

Meat as driver of climate change

The chain reaction between meat production and climate change, which in this case concocted a dangerous mix, is one of the most significant ESG risks in agriculture. This is not only what our research partners claim: according to the Food and Agriculture Organization of the United Nations (FAO) some 15% of the greenhouse gases caused by man are due to cattle-breeding. The ratio of meat to dairy in terms of emissions caused by cattle-breeding is 3:1 per gram of produced protein.

Is climate-friendly meat production possible?

One of the heaviest factors in this equation is animal feed – an aspect my colleague Stefanie Schock has already addressed in another article of this ESG Letter. The choice of animal feed also affects massive discrepancies in the emissions of animals via the challenges of cultivation such as deforestation and fertilising. An intensively bred cow that is fed corn and soy produces significantly more CO2 than an animal grazing on an alpine pasture in Tyrol.

The latter also comes with the upside that pieces of land can be used for the production of protein that would otherwise not be accessible to food production. Also, the continuous growth of grass compensates for an additional 10% of emissions from global cattle-breeding according to estimates by the FAO.

Global cattle-breeding

Unfortunately, this comparably climate-friendly way of cattle-breeding does not scale up globally. Even in the enormous Australian outback, the local, extensive form of cattle-breeding is limited by the availability of water. Depending on the region, up to 16,000 litres of water are required to produce 1kg of beef. As a result, more and more herds in Australia simply die of thirst.

In the USA, the biggest producers JBS, Cargill und Tyson Foods largely depend on breeding facilities in drought areas. The climate change exacerbates the lack of water. A vicious circle.

Even though the FAO points out that emissions could be cut by up to 30% if best practice were to be followed, our research partners explain that the rising demand would pretty much cancel out this gain. The alternatives still are to consume less or use meat substitutes.

The future of meat consumption

This is also relevant since our partners regard the increase in meat demand (especially red meat) as health hazard. This is in direct violation of the third sustainable development goal of the United Nations.The World Health Organization (WHO) classifies processed meat products on the basis of the certainty of their carcinogenicity in the same category as tobacco smoke and asbestos.

Sadly, meat substitute products such as the pea-based burgers by the current stock exchange darling Beyond Meat are not beyond criticism either. While they do reduce the environmental footprint relative to traditional meat products and avoid the questionable breeding conditions of intensive cattle-breeding, their high salt content means they are no panacea either, as the analysts of our research partners explain.

Infografik Fleisch

Legal note:
Prognoses are no reliable indicator for future performance.



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