Increasing demand for dairy in emerging markets
Dairy and the UN Sustainable Development Goals (SDGs)
What about the environmental impacts?
At the same time, we must acknowledge the significant environmental impacts of dairy farming. Increasing demand for dairy products around the world is putting significant pressure on the natural resources that make this industry possible, particularly water and soil. Dairy cows and their manure also produce significant amounts of methane and other greenhouse gas emissions that contribute to climate change. Meanwhile, poorly handled manure and fertilisers can degrade local water resources, and unsustainable dairy farming and feed production practices can lead to the loss of ecologically important areas. Overall, these factors can contribute to the growing problem of biodiversity loss, which you can read more about here.
Great strides have already been made to reduce the environmental impact of dairy farms. According to the US Sustainability Alliance, milk production in the US has quadrupled in the last 60 years, but a gallon of milk today uses 65% less water and greenhouse gas emissions have been reduced by 63%. Progress continues to be made e.g. the World Wildlife Fund’s Net Zero Initiative, but there is still considerable room for improving the sustainability of the industry.
Our responsible investment approach
Engaging for positive change
In this context, we have asked companies in the dairy industry to:
- Fully incorporate climate change and other environmental considerations into long-term business strategies
- Set science-based carbon emissions reduction targets that cover emissions from the entire dairy value chain
- Collaborate with farmers to develop and implement sustainable agricultural practices, including around manure, soil and waste management
- Map environmental risks and opportunities to raw milk and feedstock supply chains
- Explore and invest in alternatives to plastic packaging
- Consider expanding product portfolios to include plant-based alternatives
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