Soil and water

FAIRR engages the world’s largest meat producers to fight biodiversity

The 70 billion animals in the global food system processed each year produce more than 3 billion tonnes of waste, including manure and urine. Poor manure management practices mean that much of this waste ends up polluting ecosystems and becoming a biodiversity risk – not to mention an ESG risk for the companies producing the meat.

The FAIRR Investor Network has launched an engagement with 10 of the world’s largest chicken and pork producers to solve this massive manure management problem. Investors representing more than $8 trillion in assets under management, including Robeco and Aviva Investors, will ask these companies to disclose “how manure is managed throughout their supply chain”. More importantly, investors will wonder what concrete steps these companies are taking to mitigate risk.

Background: manure management issues

There are “clear and worrying” links between industrial food systems, poor manure management and biodiversity loss. A new report from FAIRR describes the problems:

  • Manure contains valuable reserves of nitrogen and phosphorus fertilizers, essential nutrients that plants need to survive.
  • Unfortunately, sstorage, methane extraction and manure composting require capital and other resources. As a result, manure is usually only transported a few kilometers from livestock before being spread on crops.
  • When manure is applied in incorrect amounts, crops cannot absorb all the nitrogen and phosphorus. Leaching occurs and nutrient runoff becomes a pollutant to soil, water and air.
  • FAIRR notes that 50% of freshwater biodiversity loss is attributed to food systems.
  • More broadly, biodiversity loss can be one of the main impacts of profound ecosystem degradation,” the report notes. Case in point: There are more than 400 eutrophic zones – or “dead zones” – around the world thanks to nutrient runoff.
Industrial chicken farming. Photo credit: iStock

Why is this important:

By 2030, the planet will generate at least 5 billion tons of dung each year, 79% of which is currently produced by livestock, according to FAIRR.

Such amounts of untreated manure, whether used as fertilizer or discarded, pose health risks to people and the planet. Excess nutrients harm soil and water sources and their ecosystems. They can also cause problems such as groundwater contamination and degraded air quality for communities near factory farming facilities.

FAIRR’s report highlights a number of possible ways to improve manure management, from nutrient management plans to better storage.

A particularly attractive solution is to create a “circular nutrient cycle,” which promotes the movement of manure to nutrient-poor growing areas. Tyson Foods, for example, transports chicken manure from its sites in the Illinois River watershed to areas with lower nutrient density.

This circular system could also help reduce some reliance on synthetic fertilizers, which is a particularly timely issue given the impact of the war in Ukraine and general post-Covid supply chain issues on supply. and prices.

Whether such a system could work on a large scale is still up for debate, suggests Butcher.

“We’ve seen Smithfield do something similar with an unlisted company, and we’re just wondering if this is a real opportunity?” he says. “Is this something that should be supported by meat producers as part of their commitment to reduce waste and pollution? It’s a bit of a blur, but we think the potential is there at least.

How the FAIRR Commitment will work:

The overall goal of the engagement is to understand the biodiversity, climate and social risks that arise due to poor manure management at all levels of the supply chain. According to FAIRR, this includes: “1) [companies’] own facilities, 2) owned or contracted farms, 3) upstream forage crops and 4) downstream once it leaves these facilities and farms.

  • The commitment involves 10 publicly traded pork and chicken producers: Maple Leaf Foods, Tyson Foods, Seaboard Foods, Hormel Foods, Muyuan Foods, WH Group, Charoen Pokphand, BRF, JBS and Cranswick.
  • Two fertilizer companies, Darling Ingredients and Yara, will also participate, as their services include extracting and marketing nutrients from manure.
  • The first phase of the engagement will verify these companies’ risk assessment processes and whether they have an action plan to address these risks.
  • Companies will receive questions which they can answer in writing or in person when they meet with FAIRR investors.
  • Any investor from the FAIRR network is invited to join these sessions.
  • The engagement closes to new investors on October 21.
A tractor spreading fertilizer. Photo credit: iStock

The broader commitment:

This commitment is part of the series of FAIRRs targeting biodiversity. Specifically, FAIRR examines three key pillars of biodiversity loss: waste/pollution; land management and resource use; and land/sea use change.

As companies move into these areas, there are transition risks as well as opportunities for investors.

“We have the TNFD [Taskforce on Nature-related Financial Disclosures] future, which will be a framework for investors and companies to report on what they see about nature and biodiversity and give them the opportunity to discuss the risks and opportunities they see in this space,” Max Boucher, ssenior manager, research & engagements at FAIRR, says APN. “It makes sense to have [these pillars] operational in advance.

FAIRR started with waste/pollution as it saw little activity from investors compared to the other two pillars.

“It also made sense from a fertilizer standpoint,” says Boucher. “If you think about fertilizer costs right now, they’re skyrocketing [and] there is a global need for more sources of fertilizer.

As for the decision to focus on chicken and pork, both are among the most popular meats in the world. About 79% of both are grown entirely in industrial settings.