Change diets, not the planet

The link between food and sustainability

We explore how shifting diets can help create a more sustainable world.

Read this article to understand:

  • What a sustainable diet looks like
  • How to shift food culture
  • The main investment opportunities

In 1798, Thomas Malthus wrote his influential work, An Essay on the Principle of Population, in which he gloomily deliberated on food supplies failing to keep pace with population growth. While episodes of food shortages have occurred regularly in the intervening years, particularly in developing countries, the global food system has generally defied Malthus’ predictions of mass famine.

Modern intensive agriculture produces more than enough calories to feed 7.8 billion people – the biggest global population in human history. The big question is whether this will remain the case indefinitely. After all, there is only so much land and resources to produce food. 

The problem with meat

The world’s food systems contribute to one third of global greenhouse gas emissions, making it the second biggest contributor to climate change after energy. It is also the single biggest contributor to biodiversity loss, deforestation, drought, freshwater pollution and the collapse of aquatic wildlife, while agricultural land use is the main driver of deforestation.1

“No matter which method you use for your assessments, the message is always the same. We need a great food transition made up of rapid dietary shifts to plant-based diets; deep reductions in food waste; and increases in yields,” says Paul Behrens, an academic in environmental change at Leiden University in the Netherlands and author of The Best of Times, The Worst of Times: Futures from the Frontiers of Climate Science.

While there have been suggestions meat consumption has already peaked, it seems more likely the situation will get worse with over three billion people set to join the global middle classes by 2030.

“In developing markets, and especially China, meat consumption per capita is increasing as people join the middle class. That, compared to these slight reductions in meat intake from developed markets, means we're seeing an increase in demand; we've not reached the peak yet,” says Jonathan Toub, co-manager of the Aviva investors Natural Capital Transition Global Equity strategy.

Not all meat is created equal, however. Figure 1 shows emissions from protein-rich foods per 100 grammes of protein across a global sample of 38,700 commercially viable farms in 119 countries. The height of the curve represents the amount of production globally with that specific footprint. Cattle is the livestock sector with the biggest variations in emissions, with Paraguay emitting over 200kg of CO2 for every kilo of beef, while Denmark emits less than 15kg.

Figure 1: Protein’s carbon footprint (kgCO2e)
Protein’s carbon footprint
Source: ‘The National Food Strategy: The plan’, 20212

The main issue with cattle (and other ruminants) is their stomachs, which ferment plant cellulose into digestible starches. This process creates methane, which the animals burp out.

There is no agreed definition or way to measure what a sustainable diet is; sustainability is about more than carbon intensity

Beyond understanding the issues with meat, there is no agreed definition or way to measure what a sustainable diet is; sustainability is about more than carbon intensity – it must account for energy, biodiversity and water usage, as well as social factors. However, there are some broad principles.

“We need to eat more plants and less dairy and meat, particularly red meat. And that's for the sustainable part of it. But we shouldn’t forget health, which means eating fewer foods high in salt, sugar and highly processed,” says Anne Bordier, director of sustainable diets at World Resources Institute (WRI), a non-profit research organisation.

Figure 2 shows how switching from a baseline to a flexitarian diet could have a massive impact on emissions.

Figure 2: GHG emissions in 2030 by different diets (GtCO2-eq)
GHG emissions in 2030 by different diets
Source: ‘The state of Food security and nutrition in the world’, 20213

Being pragmatic, animal-based consumption is not going to zero anytime soon. According to The UK National Food Strategy, meat consumption needs to fall by 30 per cent and vegetable and fruit intake needs to increase by the same amount. “A 30 per cent reduction sounds more achievable for a lot of people than cutting meat out altogether,” notes Bordier. “That’s an important message to get across. It is not realistic to expect everyone to go vegan.”

Nudges and policy action: Shifting the food culture

As part of the drive to cut emissions and other harmful environmental effects from food production, farming practices must change to minimise impact and improve nature and societal outcomes.

The Global Farm Metric (GFM) coalition believes there should be metrics to understand the impact of a farm not only on nature, but also on society. These range from water quality to soil structure, to animal welfare and the skills of the workforce.

The GFM coalition believes there should be metrics to understand the impact of a farm not only on nature, but also on society

Trewern believes one option would be to eat fewer and better animal products. Better meat comes from animals reared within healthy ecosystems, favouring natural diets from sustainable sources, in well-managed farms with high standards of animal welfare. Farming in this way helps to maintain soil health and fertility for crop production, protect landscapes and support biodiversity (livestock plays an important role in environmental or land management).

A shift in agricultural use would also have human benefits. Half of the world’s habitable land is used for agriculture, of which more than three-quarters is for livestock.

Eating a local diet can help reduce carbon footprints and the environmental and potential labour issues involved in growing and transporting food. But changing food culture will be a key piece of the jigsaw. There are two types of incentives: economic and cultural – a higher price for meat (which should encourage people to look at vegetarian options) and seeing everybody else doing it. Both create a feedback loop.

“Behavioural change is a really important tool we have at our disposal. It's difficult to tell people what to do, it doesn't work. And there is a big disconnect between intent and action,” says Bordier.

Investment opportunities

The drive to change dietary habits is bringing investment opportunities and risks. According to the Good Food Institute, the US plant-based retail market grew 27 per cent last year, almost twice the growth for total retail food sales.4 But while the focus is on companies developing products as close to meat as possible – via companies such as Beyond Meat – cellular agriculture, the production of agricultural goods through cell cultures, is another area of interest.

Moving away from meat substitutes, investors can explore other options, like vegetable proteins and insects. Plant-based milks have also seen vast growth rates. As per Future Market Insights (FMI), the overall market value is expected to reach $31 billion by 2031.5

Another way to look at opportunities is through supply chains. For example, Danish bioscience company Chr. Hansen is working to reduce artificial additives and increase the shelf life of foods like yogurt and meats using fermentation and new cultures, having set itself a goal of reducing yogurt waste by two million tonnes by 2025.

In terms of food efficiency, the localisation of production will be a key area for improvement, including through indoor vertical farming.

As the scrutiny intensifies on these issues we could see many technological innovations over the next 15 years

Eugenie Mathieu, senior impact analyst and earth pillar leader at Aviva Investors, cites regenerative farming as an emerging area of interest, with the potential to increase yields as well as reduce soil erosion, and water and chemicals run-off, which is a big cause of pollution in rivers and oceans.

As well as investing directly in companies, investors have a key role to play through engagement. The bottom line is that as the scrutiny intensifies on these issues, not least because diet is such a key part of the discussion on net-zero targets, we could see many technological innovations over the next 15 years.

Related views

Important information

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (AIGSL). Unless stated otherwise any views and opinions are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. Information contained herein has been obtained from sources believed to be reliable but has not been independently verified by Aviva Investors and is not guaranteed to be accurate. Past performance is not a guide to the future. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Nothing in this material, including any references to specific securities, assets classes and financial markets is intended to or should be construed as advice or recommendations of any nature. Some data shown are hypothetical or projected and may not come to pass as stated due to changes in market conditions and are not guarantees of future outcomes. This material is not a recommendation to sell or purchase any investment.

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