A coalition of investors is calling on global fast food giants, including McDonald’s, KFC, Burger King and Domino’s Pizza, to set tough targets to urgently act on climate and water risks in their supply chains.
Representing more than $6.5 trillion (£4.9tn) in total, the group is challenging the organisations to set “tough targets” to reduce greenhouse gas emissions and water usage of their meat and dairy suppliers.
The investors have sent letters to the fast food companies – which also include Chipotle Mexican Grill and Wendy’s – asking them to explain how they plan to enact “meaningful policies and targets” to de-risk their supply chains by March 2019.
More than 80 investors, including BMO Global Asset management, Aviva Investors and Aegon Asset Management, have signed the letter.
A new analysis by collaborative investor network FAIRR reveals agricultural emissions, including those from meat and dairy, are on track to contribute around 70% of total allowable greenhouse gas emissions by 2050.
This is expected to create an 11-gigaton mitigation gap between projected emissions and the target level required to keep global warming under a 2C threshold.
The livestock sector is also estimated to use around 10% of annual global water flows.
The investors are calling on fast food companies to adopt a supplier policy with clear requirements of animal protein products to report and reduce emissions and freshwater impacts, commit to publicly disclose progress on the targets annually and undertake a climate scenario analysis in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Jeremy Coller, Founder of FAIRR and Chief Investment Officer at Coller Capital said: “Everyday 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. To put this in perspective, if cows were a country, it would be the world’s third largest emitter of greenhouse gases.
“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. A failure to tackle these major environmental problems in corporate supply chains puts the long-term financial sustainability of these household names under threat. Investors are calling for more strategic and innovative thinking to manage these risks.”