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article imageInvestors urge fast-food giants to root out climate risks

By Karen Graham     Feb 1, 2019 in Environment
More than 80 investors with $6.4 trillion (£5trn) in assets under management have told six of the world’s largest fast-food companies to urgently tackle climate and water risks in their supply chains.
The owners of Domino’s Pizza, McDonald’s, Burger King, Chipotle Mexican Grill, Wendy’s, KFC and Pizza Hut have been sent letters by a coalition of global investors - members of Farm Animal Investment Risk and Return (FAIRR), asking that they set and monitor targets for greenhouse gas (GHG) emissions and freshwater impacts.
The big concern is with the supply chain of the fast-food companies, specifically, the animal agriculture industry. It has long been criticized as being the one sector with the highest GHG emissions without a low-carbon plan, reports The Guardian.
"Fast-food giants deliver speedy meals, but they have been super slow in responding to their out-sized environmental footprints," said Mindy Lubber, head of Ceres, which lobbies for greener business practices and is backing the initiative.
Climate change and the impacts of a warming world have caused investors to take a closer look at companies - judging them according to ethical, sustainable and governance criteria - all important in judging a company's performance. The fast-food companies censured for not mitigating their environmental impacts account for over 120,000 restaurants worldwide.
Not only do cattle pass massive quantities of planet-warming methane  but huge swathes of carbon-abs...
Not only do cattle pass massive quantities of planet-warming methane, but huge swathes of carbon-absorbing forests –- mostly in Brazil -– are cut down every year to make room for them
YASUYOSHI CHIBA, AFP/File
“If we are to meet the global climate ambitions set by the Paris agreement, and ensure the availability and sustainable management of global water resources, then global fast good brands need to take concrete action to manage supply-chain emissions and water impacts,” said Heike Cosse, from Aegon Asset Management.
“The takeaway from investors is that those firms that fail to meet this challenge face regulatory and reputational risks that put their long-term financial sustainability under threat.”
Livestock farming's impact on the environment
Livestock farming is one of the leading causes of deforestation and water pollution, responsible for 14.5 percent of global greenhouse gas emissions - methane, nitrous oxide, and carbon dioxide. Today, it is estimated that the global demand for beef will increase by 95 percent by 2050, and this could have disastrous consequences for the planet.
Around the world, livestock farming uses 83 percent of all agricultural land, despite providing only 18 percent of the world's caloric intake. In the U.S., the majority of large meat processing plants that pollute streams and rivers face few consequences, due to a rollback of environmental protections initiated by President Obama.
At least two-thirds of the world's publicly listed meat and livestock companies, including Canada's BMO Global Asset Management and Britain's Aviva Investors, do not have targets for reducing their GHG emissions, says FAIRR. In Europe, the population eats five times the recommended amount of red meat, poultry and dairy products, according to Fairr.
"Investors who have signed on believing these risks threaten the long term viability of the quick service restaurant sector," said Aarti Ramachandran, London-based FAIRR's head of research, reports The Thomas Reuters Foundation.
Cattle and herds of other farm animals are high on the list of methane emitters.
Cattle and herds of other farm animals are high on the list of methane emitters.
USDA
“Every day around 84 million adults consume fast food in the US alone, but the inconvenient truth of convenience food is that the environmental impacts of the sector’s meat and dairy products have hit unsustainable levels,” said Jeremy Coller, founder of Fairr and chief investment officer of Coller Capital.
“To put this in perspective, if cows were a country, it would be the world’s third largest emitter of greenhouse gases.” He added: “Other high-emitting industries, such as cars or oil and gas, are beginning to set clear yet ambitious climate targets, making animal agriculture one of the world’s highest-emitting sectors without a low-carbon plan.”
The group of investors has also urged companies to take a look at the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in setting up their climate action plans. TCFD provides a framework for companies to develop more effective climate-related financial disclosures through their existing reporting processes.
More about fast food companies, Investors, climate risks, Greenhouse gas emissions, water risks
 
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