ethical stewardship
Animal agriculture & deforestation
Animal agriculture uses a disproportionate amount of land and other resources relative to the nutritional value it provides. We restrict+ investments in conventional animal agriculture because of its large environmental footprint and because of animal suffering. But we leverage our connections in adjacent industries to influence change.
Addressing the commercial drivers
Our research suggests we need land to offset the emissions from agriculture as well as other hard to abate sectors. Our goals are:
Net zero deforestation in Australia
An increased % of land revegetated and protected
A reduction in animal protein production and consumption
Multiplying our influence
We leverage our connections to adjacent industries exposed to animal agriculture to influence change, including banks, food retailers, consumers and other investors.
We use all our stewardship tools, including collaborating with NGOs and using our public voice.
Offsetting the emissions from animal agriculture
Animal agriculture is the primary driver of deforestation in Australia, contributing to climate change and biodiversity loss.1 It also presents an opportunity cost – land currently used for grazing & growing animal feed could be used to sequester carbon and restore ecosystems.
Australia is the only developed country in the world that has been identified as having a deforestation hotspot.2
In QLD, around 80% of likely or known koala habitat cleared between 2018 and 2019 was bulldozed for beef production.3
Action we’ve taken
In FY22 we focused on:
We use collaborative and independent engagements to better understand how financers of the livestock industry and the major supermarkets think about the environmental impacts of livestock production in Australia. Collaborative investor engagements allow multiple stakeholders to have conversations about this issue with banks and retailers and can increase influence when a number of investors raise similar concerns. We’ve signed up to or continued our involvement in the following global initiatives:
- Continued our active membership of the UNPRI Sustainable Commodities Practitioners Group which seeks to address deforestation in beef supply chains.
- Signed up to the Finance for Biodiversity Pledge and connected with Nature 100 - a global investor initiative that seeks to facilitate investor engagement on nature-related issues.
- Engaged with Woolworths in a joint investor call arranged by FAIRR, to interrogate how they are planning to address Scope 3 emissions and other impacts in their animal-product supply chains and support a transition towards more sustainable plant-based diets.
- Signed up to the Financial Sector Commitment Letter on Eliminating Commodity-driven Deforestation.4
During the year we also engaged NAB independently about deforestation exposure in their loan books.
Global initiatives such as the UNPRI Sustainable Commodities Practitioners Group and Nature 100 are unlikely to focus on the drivers of biodiversity loss in Australia, but we can take learnings from their broader programs and apply them locally.
To that end, we established a corporate engagement sub-group of the RIAA Nature Working Group to look at a targeted engagement program focussed on Australian food systems.
We explored the value of commissioning independent research to assesses the climate and biodiversity impacts of the Australian livestock industry, and address whether we need a reduction in livestock in Australia to meet the goals of the Paris Agreement and to halt and reverse biodiversity loss by 2030.
- We have been speaking closely with several NGOs about this potential research to understand what information is already out there, and where the gaps are.
- We have started conversations with potential researchers.
Where we draw the line
We restrict+ investments in conventional animal agriculture companies (this includes organic and free-range production).
Why?
We assess the harm to animals and the disproportionately high environmental impact to be unnecessary when there are less impactful alternatives.
What’s next
We will continue to pursue collaborative engagements on the climate and biodiversity impacts of Australian livestock through the forums we worked with in FY22.
We are developing a research proposal on the climate and biodiversity impacts of Australian livestock, with the goal of using the output to raise awareness and inform collective engagements.
1. The Wilderness Society have analysed QLD government data on land clearing and found that 93% of deforestation and land clearing in QLD is for conversion to pasture. See also: Evans, Megan (January 2016), Deforestation in Australia: drivers, trends and policy responses which shows in Fig 3 that the majority of deforestation between 1970 and 2014 was for pasture.
2. WWF Australia (13 January 2021), Australia remains the only developed nation on the list of global deforestation fronts.
3. Wilderness Society
4. Race to Zero This website provides you with general information only and does not take account of your individual investment objectives, financial situation or needs. Before acting on it, consider its appropriateness to your circumstances and read the Financial Services Guide, the Product Disclosure Statement and Target Market Determination relevant to the product which is available on our website. You should consider seeking advice from an authorised financial adviser before making an investment decision. Past performance is not a reliable indicator of future performance.
© 2022 Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229949). Australian Ethical Superannuation Pty Ltd (ABN 43 079 259 733, RSE L0001441, AFSL 526 055) Trustee of the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI/SPIN AET0100AU) .
