Marking two years of COVID-19, new research from FAIRR warns failure to improve crowded, high-stress conditions in animal agriculture fosters ideal breeding ground for new, zoonotic diseases.
Global meat giants such as Cal-Maine Foods (US) and New Hope Liuhe (China), both suppliers to retailers such as Walmart*, are among 38 firms criticized by investors for failing to tackle and/or disclose information on conditions and practices that could enable new diseases to emerge and spread.
Three out of four new diseases are zoonotic ones such as COVID-19 – i.e., they cross from animals to humans. And since COVID-19 emerged two years ago, there has been increasing pressure on the meat industry to tackle conditions in intensive facilities and meatpacking plants.
United Nations research shows that 4 of the 7 human-mediated factors most likely to drive the emergence of a new zoonotic (animal-to-human) pandemic are directly linked to agricultural intensification and increasing meat consumption. Intensive animal production raises the risk of new zoonotic diseases emerging and spreading, through:
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Intensive animal production processes providing an ideal environment for new strains to emerge and spread — involving high stress, crowded conditions; lowered genetic diversity; live transport and indoor confinement;
Disease-friendly working conditions, accelerating transmission through factors including long working hours, proximity to other workers, cold working temperatures, and insufficient protective gear.
Yet, new research from FAIRR — a network backed by investors managing over $48 trillion of assets — found that 38 of 60 (63 percent) large, listed meat, fish and dairy producers ranked ‘high risk’ on its Emerging Disease Risk Ranking, meaning they score poorly across a set of seven criteria vital to preventing future zoonotic pandemics — including worker and food safety, deforestation and biodiversity management, and animal welfare.
These latest findings echo FAIRR’s 2020 report, An Industry Infected — which centered on 44 of the industry’s biggest firms, highlighted by investors for their inability to prevent the emergence of new zoonotic diseases. This year’s 63 percent companies of concern is a slight improvement from the 73 percent setting off investor alarm bells in June 2020, but it still shows that the vast majority of the industry continues to perform poorly. Eight of the ten worst-performing companies in the ranking are based in Asia.
FAIRR also reveals that following an engagement between investors and 7 large meat firms (including Tyson Foods and JBS USA), six of seven companies temporarily enhanced sick leave during the COVID-19 pandemic to prevent unfit employees from attending work — but none of the seven have yet adopted such policies permanently. This risks perpetuating a culture where sick workers, who may be exposed to new strains or new diseases, feel financial pressure to come to work.
“From avian and swine flu to COVID-19, it’s time for meat companies and policymakers to learn from COVID-19 and to invest in preventing the next pandemic,” says Jeremy Coller, Chair and founder of FAIRR, and Chief Investment Officer of Coller Capital. “Intensive farming environments, housing most of the 70 billion farm animals reared every year, are a known breeding ground for disease. Aggravating factors like low genetic diversity, cramped enclosures and poor working conditions that do not offer adequate sick pay amplify this risk many times over.
“The message from the markets is clear: Following SARS, swine flu and Ebola, COVID-19 must be a line in the sand. Business-as-usual animal agriculture risks incubating the next zoonotic pandemic, posing both an intolerable investment risk and a threat to global public health. The sector must improve rapidly, starting with welfare conditions for both animals and workers.”
Since the pandemic began, several high-level intergovernmental panels have looked at zoonotic disease risks but have largely focused on pandemic response, rather than prevention. Policies have recently been enacted in some countries on deforestation, the illegal wildlife trade, and to respond to the risk of mutation of COVID-19 in fur farms. Improved transparency and disclosure of key climate, labor and nature-related risks could provide the necessary incentives for companies to improve their practices.
“The way we currently produce and consume food is pushing the natural world to its limits. Land use change and deforestation, driven in large part by agricultural and livestock intensification, is driving the emergence of new zoonotic diseases as habitat loss puts wildlife into close contact with humans and farm animals,” says Dr Maria Neira, Director of the Department of Public Health and Environment at the World Health Organization (WHO). “The impact of COVID-19 on our collective health and economic wellbeing is unfathomable. We must do everything in our power to reduce the risk of a new pandemic emerging, and in this the importance of sustainable food systems cannot be understated.”
Methodology and further results
Companies’ Emerging Disease Risk Ranking combines six risk factors that contribute to the outbreak of emerging diseases in intensive animal production:
Deforestation & biodiversity
Waste & pollution management
Exposure to alternative proteins is also taken into consideration as an opportunity factor.
The Emerging Diseases Risk Ranking uses data from the Coller FAIRR Protein Producer Index — which assess the 60 publicly listed animal protein producers worth a combined $363 billion against 10 environmental, social and governance (ESG)-related factors.
For two of the risk factors – Waste & pollution management and Deforestation & biodiversity – 98 percent** and 76 percent of companies, respectively, are categorized as “high risk.” Antibiotic use is still a poor-performing risk factor, with 64 percent of companies falling into the “high risk” category, an improvement from 77 percent in last year’s report.
COVID-19 (SARS-CoV-2) is the most destructive of a string of zoonotic diseases to emerge in recent decades — including SARS, H1N1 Swine Flu, Middle East Respiratory Syndrome (MERS), Ebola, Zika and Nipah.
“The FAIRR Emerging Disease Ranking is a wakeup call for the meat industry. As a leading global investor, we seek clarity from companies within the meat industry to understand whether and how their practices may be viewed as causal or contributing factors to a future pandemic, be that from a zoonotic disease like COVID-19 or from the ‘silent pandemic’ of antimicrobial resistance (AMR),” says Alex Burr, ESG Policy Lead at Legal & General Investment Management. “As policymakers look to strengthen approaches to pandemic preparedness and prevention, they must not overlook how greater transparency in the market can help. Policymakers should consider how they integrate such emerging risks as they seek to develop a comprehensive, robust and internationally harmonized corporate sustainability reporting standard.”
*Information correct as of November 2021
**Excluding aquaculture companies