By Brooke Barton
Americans consume a lot of ham at Christmas time. In fact, half of U.S. ham consumption takes place over the Christmas and Thanksgiving holidays. And producing those hundreds of millions of pounds of pork generates a lot of greenhouse gas emissions.
Smithfield Foods Inc, the largest pork processor and hog producer in the world, in fact, estimates that its operations emit as much carbon dioxide per year as five coal-fired power plants.
That’s why Smithfield recently stepped up and became the first meat company to set a farm-to-fork climate goal. The pork giant, a wholly owned subsidiary of China-based WH Group Ltd., plans to cut its greenhouse gas emissions 25 percent over the next eight years through such actions as working with growers to optimize fertilizer use on grain grown for feed and installing advanced manure management technologies, including systems to capture methane gas from manure.
Now that’s a meaty commitment. Agricultural emissions account for nine percent of the U.S. GHG footprint, and the meat industry makes up a large portion of that footprint.
Smithfield’s climate goal reflects a shift in the meat industry towards greater attention to environmental and social risks, driven by consumer and investor demands for increased accountability. Many others in the food and beverage industry—such as General Mills, Kellogg’s, Unilever and PepsiCo—have already developed sustainable sourcing and/or science based GHG goals, but the meat sector has been slow to come to the table.
Increasingly, however, meat companies are acting on the reputational, regulatory and market risks tied to the traditional industrial meat business model -- from climate change and water pollution, to excessive antibiotic use and animal welfare concerns, to changing consumer dietary preferences.
As Smithfield Chief Executive Ken Sullivan told the Wall Street Journal, “Everyone is more sensitive to these issues these days, including our customers.” Sullivan said that he expects the move will not only save money but boost Smithfield’s standing in restaurants and grocery stores, as consumers increasingly seek assurance that their food was sustainably produced.
Smithfield is not the only meat company seeking to increase its competitiveness by addressing sustainability challenges. Hormel Foods, as part of the Ceres-WWF AgWater Challenge, recently committed to developing a comprehensive water stewardship policy by setting water management expectations that go beyond regulatory compliance for its major suppliers, contract animal growers and feed suppliers—a meat industry first. In early December, Tyson Foods announced the launch of a new venture capital fund to enable the company to diversify its product mix with its first investment in Beyond Meat, a producer of plant-based burger patties.
Shareholders are also taking notice of the pressures on the meat industry business model. Last year, 60 investors worth 2.6 trillion in collective assets asked 15 food sector companies – including Hormel, JBS USA, Pilgrim’s Pride and Tyson, -- to improve their management of water risks.
In the wake of the devastating flooding of manure lagoons in North Carolina after Hurricane Matthew, 45 institutional investors sent letters to the CEOs of four of the largest players in the U.S. meat industry – asking them to address climate change and water pollution risks associated with the feeding, slaughtering and processing of livestock. This follows on the heels of a large shareholder push whereby a $1.25 trillion group of 40 institutional investors asked 16 multinational food companies to respond to the material risks of industrial animal production and their plans for diversifying their product mix to include more sustainable plant-based alternatives.
At the end of the day, producing more, truly sustainable protein (animal-based or otherwise) will be essential if we want to feed nine billion people without ruining the planet. The question is whether companies – and their shareholders – can move quickly enough to meet the challenge.
Brooke Barton is Senior Program Director of Water and Food Programs at Ceres, a nonprofit organization that is mobilizing many of the world’s largest companies and investors to take stronger action on global sustainability challenges.