Energy
Sunday, July 17th, 2022 9:30 am EDT
With the market fluctuating like a roller coaster these days, it’s hard to figure exactly what areas make good sense to grow your earnings for the future. Have you ever thought to invest in plant-based alternatives?
The Boston Consulting Group (BCG), a global consultancy firm, has issued a report that finds, for each dollar, investment in plant-based alternatives results in way more greenhouse gas (GHG) savings than lots of other investment opportunities. And there’s more good news — moving human diets from meat to plants means less forest is destroyed for pasture and fodder growing and fewer emissions of the potent greenhouse gas methane produced by cattle and sheep.
BCG surveyed more than 3,700 people in the UK, US, China, France, Germany, Spain, and the United Arab Emirates. It found 30% of consumers would switch to alternative protein products if they had a positive climate impact. About 90% of people said they liked at least some of the alternative protein products they had tried.
How does improving and scaling up the production of meat and dairy alternatives compare with other green technologies?
- 3 times more greenhouse gas reductions compared with investment in green cement technology
- 7 times more than green buildings
- 11 times more than zero-emission cars
What does the report say about the increasing trend to invest in plant-based alternatives?
- Investment in alternative proteins has jumped from $1 billion in 2019 to $5 billion in 2021.
- Alternatives make up 2% of meat, egg, and dairy products sold, but data indicate they will rise to 11% in 2035 on current growth trends.
- The protein transformation is one part of a broader remodeling of the food system. Every stakeholder along the value chain is likely to feel the impact of the transformation, and many will find big opportunities in contributing to building a sustainable food system.
Why is this trend to invest in plant-based alternatives happening? The overall growth in alternative protein investments is consistent with a broader focus on sustainable investing globally, which is expanding 3 to 5 times faster than traditional investing, with a focus on solutions to the climate crisis.
What kinds of emissions do meat and dairy agriculture produce? Meat and dairy production uses 83% of farmland and causes 60% of agriculture’s greenhouse gas emissions but provides only 18% of calories and 37% of protein.
What are the projections for peak meat consumption? Europe and North America will reach the highest points of meat eating by 2025, at which point consumption of conventional meat starts to fall.
How does a decision to invest in plant-based alternatives affect global decarbonization goals? The biggest results are in terms of the market value of avoided CO2e emissions per dollar invested in mitigation efforts. This is referred to as the impact of capital employed (IoCE). Investments in alternative proteins produce IoCE that is magnitudes greater than corresponding decarbonization investments in other high-emitting sectors of the economy, such as transportation or buildings, can achieve.
What major investments have already taken place in plant-based alternatives?
- Venture capital invested in alternative proteins rose at an annual rate of 124%, from $1 billion in 2019 to $5 billion in 2021, according to the Good Food Institute.
- In 2020, corporations participated in about 60% of funding rounds.
- Investment in fermentation-based and animal-cell-based companies, two newer technologies, is soaring. From 2019 to 2021, the former rose more than 137%, from $300 million to $1.7 billion, and the latter rose more than 425%, from $50 million to $1.4 billion.
Why do investments in plant-based alternatives deliver such a high impact on emissions? A big difference exists between the greenhouse gases emitted when producing conventional meat and dairy products, and when growing plants. Beef, for example, results in 6-to-30 times more emissions than tofu.
What do current forecast models tell us about the potential to invest in plant-based alternatives? The models indicate that alternative proteins will represent 11% of all protein consumption by 2035, and, with some help from technology, investors, and regulators, alternative proteins could command 22% of the global market over this time frame.
Could investments in plant-based alternatives produce even greater future results? Yes. BCG said meat alternatives could grow much faster with technological progress resulting in better products, scaled-up production, and regulatory changes making marketing and sales easier.
What will convince consumers to eat more plant-based foods? Consumers in all markets express a strong willingness to shift their consumption patterns further if their biggest inhibitions regarding the products — health and nutrition, taste, and safety — are addressed.
What important areas need to be addressed to create the optimal climate to invest in plant-based alternatives? Everyone has a stake in accelerating the protein transformation and in the broader transition to a sustainable food system. The 5 target areas explored in the BCG report are:
- Supporting farmers
- Ensuring a level policy and regulatory playing field between conventional and alternative proteins
- Directing capital toward transformative ventures
- Optimizing resources and waste recovery
- Continuing to build consumer acceptance
Final Thoughts about Decisions to Invest in Plant-Based Foods
Scientists have concluded that avoiding meat and dairy products is the single biggest way to reduce your environmental impact on the planet. Large shifts in meat consumption in rich nations are essential to ending the climate crisis.
The food system accounts for 26% of current GHG emissions. Animal agriculture, the largest GHG emitter within the food system, is responsible for 15% of global emissions, roughly matching the emissions from the transportation sector. If we remain on track for an 11% share for alternative proteins by 2035, we will see a reduction of 0.85 gigaton of CO2 equivalent worldwide by 2030.
In addition to a decision to invest in plant-based alternatives, you can also get involved in the move to alternative proteins by campaigning for your city to endorse the Plant-Based Treaty. There are many different ways you can help — you can work on a plant-based schools campaign, establish a community garden, lobby government, build alliances, or help create bottom-up pressure by collecting endorsements from individuals, groups, businesses, organizations, scientists, and celebrities.
As the founders of the Plant-Based Treaty movement argue, we are facing existential threats from the climate emergency, unprecedented public health crises, world hunger, and biodiversity loss. Our food system sits at the heart of all these issues, and therefore, there must be a swift transition to a compassionate, healthy, climate-friendly food system.
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