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These vegetable salad bowls represent ESG investors in plant-based eating

The ESG Investor and the Food Revolution: Embracing a Plant-Based Diet

How a Plant-Based Diet Promotes Good Health and Socially Responsible Investing

I went vegan about three years ago, based on the research that I was doing on food, nutrition and agriculture. Since that time, I have become an evangelist for a whole food plant-based diet because of the life-changing impact it has had on me. I have lost over 25 pounds, but yet I never felt hungry, as is typical when dieting. In fact, it wasn’t a diet at all, but a lifestyle change; I eat when I am hungry and do not limit calories in any way. Not only do I feel great about myself, but I also feel good about reducing my carbon footprint as a vegan and ESG investor (environment, social and governance).

One of the Food Revolution’s most notable changes is the movement away from animal-based foods (and the companies that traditionally provide them). Increasingly, people under 40 display concern about their health, climate change and the environmental impacts of industrial livestock farming.

Socially responsible investing has increased as a result. Venture capital, family offices and CPG companies are pouring money into plant-based alternatives for meat, dairy and eggs. As consumers seek sustainable long-term food alternatives, capital floods into the market to fund companies that develop solutions.

It is a sea change with long-lasting implications for your health, your portfolio and your planet.

ESG Investors and the Rise of the Internet

The rise of the Internet and access to information changed everything.

We used to receive health and environmental information from the government or via paid industry research – neither is a very reliable source. The Internet democratized information and put research in the hands of competing experts.

Over the past 10 years, new and insightful books and articles about plant-based alternative products appeared. Directors created valuable documentaries on the topic. These are now instantly disseminated around the world via the internet.

As a food and ESG investor, I consume a lot of food and agriculture media. Over the past five years, no fewer than six new films highlighted the benefits of a plant-based diet over animal-based foods. My favorites include Gamechangers, Forks over Knives, Eating You AliveVegucated and Cowspiracy (you can find all but “Eating You Alive” on Netflix).

Do We Need Meat for Protein? A Food Revolution

Utilizing livestock as a protein source can be incredibly inefficient. Here’s a quick synopsis:

  1. Instead of getting our protein from the original plant sources, we feed those plants to animals (using a lot of water in the process).
  2. Killing, processing and transporting the animals for consumption damages soil and water sources with chemicals along the way.
  3. Factory farming creates billions of tons of animal waste for processing and disposal. This, in turn, generates significant greenhouse gasses.

But aren’t we carnivores by nature? Do we need meat for protein?

No, humans do not “need meat for protein.”

Yes, people need protein. But, most plants have protein – some have a lot of protein. We don’t need meat to survive. Humans can get more than enough protein by eating a plant-based diet.

The highest plant-based protein sources include beans, lentils, chickpeas, quinoa, soy (tofu), seitan (gluten), nuts, seeds and spinach.

In fact, the average American currently consumes more than double their required amount of protein, according to The Protein Myth by the Physicians Committee for Responsible Medicine.

Hold On Before Ordering That Burger

You may protest about eating more vegetables and nuts – you’d rather eat a great tasting burger. To be frank, you should think twice before ordering that burger.

In 2005, we received one of the most significant studies outlining the potential negative impacts of an animal-based diet. The China Study, by Dr. Colin Campbell, is based on a 20-year study conducted jointly by Cornell University and the University of Oxford. This study examined the mortality rates from cancer and other chronic diseases across different regions of China.

China’s land mass is huge, and its disperse populations displayed widely varied diets and eating habits. Urban areas in the eastern half of the country ate a more westernized diet (heavy consumption of animal-based foods). The more remote, western half of China ate a largely plant-based diet.

The study’s findings were (and still are) shocking.

It found a substantive link between an animal-based diet and all of the “non-smoking” related chronic illnesses of typical industrialized countries (heart disease, diabetes, breast cancer, prostate cancer and bowel cancer). Those illnesses were almost non-existent among populations that ate a strict plant-based diet!

The China Study became the basis for a best-selling book and a few documentaries (mentioned above).

(Side note: If you do not believe the study – and there’s nothing wrong with skepticism – I recommend you watch “Vegucated.” You’ll see what happens to three average New Yorkers after they go plant-based for six weeks. Their bodies transform, and their vital health statistics improve dramatically.)

How Can an ESG Investor Slow the Effects of Climate Change?

If we eat fewer animal-based foods and shift our productive capital towards more sustainable companies, we may help slow the effects of climate change.

The actual percentage of US greenhouse gases contributed by the livestock industry is hotly debated. Between large corporate studies and lobbying on the one hand, and politically driven agencies on the other, it sometimes proves difficult to estimate the greenhouse gas emissions (“GGE”) of livestock.

However, we can use some logic to build up a percentage range that I find, frankly, quite scary.

In 2016, the EPA published its report on the Sources of Greenhouse Gas Emissions in the U.S.

In the report, they estimated that agriculture contributed 9% of all GGEs. Of this,  livestock directly contributed about 47% through enteric fermentation (burps and farts) and manure management (about 4.2 percentage points of GGE).

Crop production accounts for another 50% of the agricultural contribution because of fertilizer use, tillage and irrigation. Approximately 70% of grain production in the United States feeds livestock (another 3.1 percentage points of GGE).

So, using some conservative estimates, livestock contributes 7.3% of GGEs in the US.

However, we can’t stop there. The food and agriculture industry also used a meaningful percent of the U.S. transportation system, contributing 26% of the GGEs. All that grain and livestock then has to be processed through manufacturing, captured in another bucket of U.S. GGEs at 21%. Even without the actual industry breakdowns among those categories, we might guess that the livestock industry contributes between 12-15% of all U.S. GGEs.

In fact, the Food and Agriculture Organization of the United Nations estimates livestock’s GGE contribution at 14.5%.

Giving up beef and dairy products only two to three days per week could dramatically reduce the US carbon footprint and, all else equal, help slow global warming.

Not to mention, being an ESG investor is not only good for the climate, but for your portfolio as well. Bloomberg’s fourth annual ranking of ESG funds found that assets managed by 75 retail funds climbed 34% to reach $101 billion in 2019. And, nine of the biggest ESG mutual funds outperformed the S&P 500 last year.

The Other Impacts Livestock Products Have on Our Environment

Raising livestock is a dirty business. The resource intensity does not stop with GGEs. One of the other big environmental impacts is the vast amount of water used to feed and raise livestock. The 2016 US Geological Survey estimates that of a total 355 trillion gallons used, two trillion gallons went directly to livestock, and 115 trillion gallons became agricultural irrigation – a large percentage of which feeds livestock.

A Cornell study by David Pimental, et al, estimated that livestock production in the US uses over 66 trillion gallons of water per year. That is the equivalent of 203,700 gallons of water for each person in the United States.

Finally, let’s talk manure. The EPA estimates (based on headcount data from the USDA) that U.S. livestock manure creates 6.1 billion kilos of nitrogen and 1.8 billion kilos of phosphorus per year. Livestock manure disposal is regulated by the EPA, but such regulations hardly ever work as intended. Every year, a portion of that manure leaches into our water systems.

Relax! You Don’t Have to “Go Vegan” to Affect Positive Change

Back in the 1990s, I invested in and helped grow Boca Burger before Kraft Foods acquired it.  As a vegetarian at that time, I can tell you it was pretty hard to eat meat-free. Today, it is much easier. We have so many great prepared food options available, including Amy’s Kitchen to Beyond Meat, Cool Beans, Ripple, Gardein, Daiya, Lightlife, Sweet Earth Foods and a variety of others.

There is a growing abundance of restaurant chains that cater to vegetarians and vegans, such as Native Foods Café, Veggie Grill, PlantPower and ByChloe. In addition, most restaurant chains are adding vegan options to their menu and several are really amping up their plant-based options, including Pret-A-Manger and Chipotle. I use a free mobile app called Happy Cow that helps me find restaurants with good vegan and vegetarian options anywhere in the world.

However, you do not have to go 100% plant-based to make a big difference for both your health and the environment. Many people are embracing a “flexitarian” lifestyle – eliminating some animal-based products but not all. You can also choose to be an ESG investor and invest in sustainable companies that promote healthier foods and healthier food processing.

You can start by going meatless or vegan one day a week, such as “Meatless Monday.”

Other folks refrain from eating meat before 5 p.m. Still, others remove meat/dairy from their daily diet two to three days per week. It is really about finding what works for you. In this way, you make a positive change for yourself and the planet’s future as a home for humans.

And, as an investor, I certainly believe that socially responsible investing is here to stay, and will continue to grow for years to come.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: Basic Investment Principles 101 – From Asset Allocations to Zero Coupon Bonds 2019 and Goal Based Investing- Planning for Key Life Events 2019. This is an updated version of an article originally published on March 2, 2017.]

About Tyler Mayoras

Tyler Mayoras is a passionate impact investor & entrepreneur focused on building a sustainable future of food. He has over 20 yrs of PE experience building successful companies.

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