Investors seek sustenance in alternative proteins

Global investors are showing greater interest in alternative proteins, such as plant-based substitutes and lab-grown meat, as the climate impact of agriculture and food production comes under the spotlight.

Environmental experts have started to highlight the impact of agriculture, especially the livestock sector, on rising greenhouse gas emissions as well as land and water use and deforestation. The world’s food system, including agriculture and land use, accounted for 25 to 30 per cent of emissions from 2007 to 2016, according to the latest IPCC report.

“The focus until now has been on fossil fuels but we’re starting to look at food and the supply chain,” said Eva Cairns, investment analyst at asset manager Aberdeen Standard Investments. “We need to see companies in food diversifying [from an animal-based supply chain],” she said.

The successful flotation of plantbased meat substitute group Beyond Meat earlier this year has also highlighted investment opportunities in alternative proteins as a way for food companies to be part of the solution.

Plant-based proteins, including meat and dairy, are also seeing high demand from consumers, partly due to health reasons but also because many environment specialists believe a change in diets can mitigate the effects of greenhouse gas emissions.

Emma Lupton, analyst at BMO Global Asset Management, said: “We’re really assessing what the risks might be and what the opportunities might be. We really want to see that a company is innovating and that it is thinking about the future in all different kinds of scenarios.”

The Fairr initiative — Farm Animal Investment Risk and Return — is an investor advisory and research network supported by asset managers who manage a total of $16tn. It has been running an investorbacked engagement programme with leading food companies and supermarket chains, raising awareness and monitoring the diversity of protein sources away from an overreliance on meat, dairy and fish.