Veganism: The Next Sustainability Frontier
Global food consumption is at breaking point, with protein consumption in western economies far exceeding the required daily intake.
A sea change in global diets?
Veganism is going mainstream. Backed by A-list celebrities and
global marketing campaigns, demand for meat-free food has
increased rapidly over the last few years.
The market value of almond milk, for example, is predicted to rise
from an estimated US$2.3 billion in 2018 to US$5 billion by 2024*.
Meanwhile, in January this year, more than 250,000 people ‘went
vegan’ as part of the global Veganuary movement – more than
the previous four years combined. Not only that, ethical investors
are backing the case, with the launch last year of the first ever
The sustainable choice?
While the decision to switch to plant-based over animal products
has traditionally been driven by ethical or health reasons,
increasingly the focus is on veganism as a more sustainable
choice, as meat and dairy are generally the more resource-intensive
Market value of dairy milk alternatives worldwide from 2013 to 2024, by category (in million U.S. dollars)
Global food consumption is at breaking point, with protein
consumption in western economies far exceeding the required
Demand for beef is set to grow 95% by 2050, but beef
production requires 20x more land and emits 20x more
greenhouse gases than plant-based proteins. In fact, according
to the World Resources Institute, if cattle were a nation it would
be the world’s third largest GHG emitter.†
A recent report on sustainable food systems, published in
medical journal The Lancet said a globally responsible diet
requires a drastic reduction in red meat consumption, particularly
in North America, and a large increase in consumption of
legumes and whole grains.
A business case for vegans
We are certainly starting to see a shift in attitudes, with leaders
in the food sector exploring new approaches to production.
Danone, the world’s largest yoghurt maker, has plans to triple its
plant-based food sales by 2025, owning brands that specialise in
dairy-free yoghurts. Meanwhile fast-food chain, McDonald's, has
introduced vegan options in Sweden and Finland.
From an investment point of view, veganism is still probably
a niche concept, although last year saw the creation of the
first ETF which screens out any company with business
activity that harms animals.
For us, we see this latest activity as part of a wider trend,
the increasing urgency of the need for action on climate
change – one of the UN’s Sustainable Development Goals.
Veganism (and its less-strict cousin ‘flexitarianism’, that is
flexible or part-time vegetarianism) are evidence of the
heightened global awareness of sustainability issues.
…but not the perfect solution
However, it is important to note this is not all one way.
While vegan foods may be beneficial from the standpoint
of reducing carbon footprints, they can be problematic in
The previous example of almond milk is a case in point.
Its production is hugely water intensive (and more than 80%
of the world’s almonds are grown in California which has
experienced severe droughts for a number of years). Not
only that, but many vegan products use palm oil, a major
factor in global deforestation.
For us, this demonstrates the importance of viewing
veganism as we do other sustainability issues in the round.
By focusing on materiality and incorporating this into the
questions we ask of companies and assessing the risks and
opportunities, we can build a more sustainable investment
case for the long term.
*Source: Statista; Grand View Research; Statista estimates.
†Source: World Resources Institute This work is licensed under the Creative Commons Attribution 4.0 International Licenstional License.
To view a copy of the license, visit http://creativecommons.org/licenses/by/4.0/
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