[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

Investors urge fast food giants to root out climate risks

More than 80 investors with $6.4trn (£5trn) in assets under management have told six of the world’s largest fast food companies to urgently tackle climate and water risks in their supply chains.

Sector under pressure to reduce emissions ©iStock
Sector under pressure to reduce emissions ©iStock

Aviva and Aegon are among the investors to sent letters to companies including McDonald’s and Dominos yesterday, asking them to explain how they will de-risk their supply chains by March.

They want to see tough targets to cut greenhouse gas emissions and water usage, warning that “animal agriculture is the world’s highest-emitting sector without a low-carbon plan”.

“When it comes to evaluating market risk, rising global temperatures and intensifying competition for water access are increasingly material factors,” said Eugenie Mathieu, senior SRI analyst at Aviva Investors.

“From field to fork, investors want to understand which food companies are monitoring and minimising the long-term environmental risks in their supply chain.” 

The investor coalition sent letters to the owners of Domino’s Pizza, McDonald’s, Burger King, Chipotle Mexican Grill, Wendy’s, KFC and Pizza Hut.

They called on the fast food giants to publish quantitative, time-bound targets to reduce emissions and freshwater impacts in their supply chains, and to publicly disclose progress annually.

The group also urged the companies to undertake a scenario analysis in line with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Jeremy Coller, founder of the Farm Animal Investment Risk & Return (FAIRR) initiative, which helped facilitate the letters, said the $570bn fast food sector’s environmental impacts had reached “unsustainable levels”.

The initiative estimates that agriculture could contribute around 70% of total allowable greenhouse gas emissions by 2050, with livestock set to use around 10% of annual global water flows.

“To put this in perspective, if cows were a country, it would be the world’s third largest emitter of greenhouse gases,” Coller said. “Investors are calling for more strategic and innovative thinking to manage these risks.” 

Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession