Investors warned off meat businesses

Investors warned off meat businesses


Anti livestock outfit's report lists world meat companies as high risk of fostering pandemics


AUSTRALIA'S red meat supply chain may be travelling through COVID-19 relatively unscathed compared to global counterparts but it still rates as extremely vulnerable to pandemics, research from a global investor network has found.

The Farm Animal Investment Risk and Return Initiative, which advises institutional investors of risks and opportunities emerging from environmental, social and governance credentials in protein supply chains, has just completed a study into the effects of coronavirus which allocates a pandemic rating to meat and dairy businesses.

FAIRR, financially backed by the Jeremy Coller Foundation, is clearly anti intensive animal production but its network now accounts for more than $20 trillion in managed assets.

This latest research, which claims the majority of the world's animal agriculture firms are not only vulnerable to future zoonotic pandemics but at high risk of fostering them, has gained substantial traction in international finance circles.

Financial advisors in Australia say it is likely to affect significant amounts of investment.

It has, however, been slammed globally by peak groups representing meat businesses.

The report found 73 per cent of the world's largest, listed animal protein producers, collectively worth more than $220 billion, score as high risk in FAIRR's pandemic ranking.

"Their poor performance across a set of seven criteria that are vital to preventing future zoonotic pandemics, including worker safety, food safety, deforestation and biodiversity management, animal welfare and antibiotic stewardship, demonstrates that intensive animal production is at serious risk of creating and spreading a future pandemic," the reports says.

It says at the end of May, the share prices of four of the largest meat processors in the United States - JBS, Smithfield, Tyson and Sanderson Farms - were down 25pc, versus the market average at 9pc.

It quotes the head of commodities at Goldman Sachs as listing livestock alongside oil as the most precarious commodities for investors next year.

Lead author of the report, titled An Industry Infected, Elliot Teperman, who is based in Melbourne, believes the fact Australian meat processing was relatively spared from the havoc that played out across the US beef industry was due to Australia in general being less affected by the virus.

"Had we not had that protection in place, our meat processing would not have been spared," he said.

"The Cedar Meats example is proof - it represents one of the largest outbreaks of the virus in Australia."

He did say one protective factor Australia had was less industry consolidation but the bottom line was it 'very hard to run any abattoir without this risk.'

He also said the more deforestation that occurred in a country, the greater the risk of zoonotic pandemics, and Australia was the only developed nation to make it on the World Wildlife Fund's global list of deforestation hotspots. He claimed livestock was the largest driver of that deforestation.

"Australians are so pro-livestock that deforestation doesn't receive the attention it should," he said.

Australian meat companies performed below the global average in the pandemic ranking but Mr Teperman said that was largely due to a culture of lack of reporting on standards.

There was an extreme lack of transparency in Australian meat businesses, he said.

"Our scoring is based on public available information and there is not much of that in Australia," he said.

"The first thing they need to do is talk about what they are doing in these spaces."

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