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

How Plant-Based Eating Promotes Good Health and Socially Responsible Investing

There is a rising interest in plant-based eating, and ESG investors are coming on board. I went vegan about five years ago because of my research on food, nutrition, and agriculture. Since then, I have been an evangelist for a whole food, plant-based diet because it changed my life. I lost over 25 pounds, but I never felt the constant hunger typical of dieting. In fact, I’m not dieting. I eat when I am hungry and do not limit calories in any way. I feel great about myself. However, I also feel good about reducing my carbon footprint as a vegan and an ESG (Environment, Social, and Governance) investor.

The ‘Food Revolution’s’ most notable accomplishment is the movement away from animal-based foods and companies that provide them. People under 40 are increasingly concerned about their health, climate change, and the environmental impacts of industrial livestock farming.

As a result, socially responsible investing is growing. Venture capital, family offices, and consumer packaged goods (CPG) companies pour money into plant-based meat, dairy, and egg alternatives. As consumers seek sustainable long-term food alternatives, capital floods in to fund companies developing solutions.

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

ESG Investors and the Rise of the Internet

At one time, the government or industry provided health and environmental information. Now, information is accessible to everyone because of the internet. The rise of the internet and access to so much information changed everything, and in this case, it put research in the hands of competing experts.

ESG investing is good for the climate and your portfolio. Reuters reported record numbers for ESG investments in 2021. Additionally, it shows an impressive growth rate at a CAGR of 18.8% from 2024 to 2030. Moreover, estimates put ESG assets, currently $35 billion, on track to reach $50 trillion by 2025.

As a food and ESG investor, I keep in touch with many food and agriculture media outlets. Over the past years, numerous films and books have highlighted the benefits of a plant-based diet over animal-based foods. My favorite movies include What’s the Health, The Game Changers, Forks Over Knives, Eating You Alive, Vegucated, Cowspiracy, and Eating Our Way to Extinction. Some books worth checking out include The China Study, How Not to Die, and Eat to Live.

Do We Need Meat for Protein?

No, humans do not need meat for protein. Yes, people need protein, but 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 dark leafy greens. Recently developed mycoprotein, a fungus-based protein, is used to produce meat substitutes. Those products contain 13g of protein per one-half cup serving.

Using livestock as a protein source, however, can be incredibly inefficient and detrimental to the environment.

• Instead of getting our protein from the original plant sources, we feed those plants to animals. That cycle represents almost one-third of all the water humans use.
• Killing, processing, and transporting animals for consumption pollutes soil and water and contributes significantly to environmental damage.
• Factory farming creates a million tons of manure daily, an overwhelming treatment and disposal problem.

Pause Before Ordering That Burger

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

Published in 2005, Dr. Colin Campbell’s The China Study examined the mortality rates from cancer and other chronic diseases across different regions of China over a 20-year period and the findings were shocking

China’s land mass is huge, and its disparate populations display widely varied diets and eating habits. According to the study, urban areas in the eastern half of the country eat a Westernized diet, including heavy consumption of animal-based foods, whereas those in the more remote western half eat a largely plant-based diet.

The data indicated a substantial link between an animal-based diet and all non-smoking-related chronic illnesses in industrialized countries, including heart disease, diabetes, breast cancer, prostate cancer, and bowel cancer. Such illnesses were almost non-existent among populations that ate a strictly plant-based diet.

Can an ESG Investor Slow the Effects of Climate Change?

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

The Environmental Impact of the Livestock Industry

The actual percent of US greenhouse gases from 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 logic to build up a percentage range that I find scary.

In 2020, the EPA published an updated report: the Sources of Greenhouse Gas Emissions in the US.

The report estimated that agriculture contributed 11% of all GGEs. Of this, livestock directly contributed more than a quarter of the total through enteric fermentation — burps and farts. Manure management accounted for 12%, making industrial livestock farming a significant contributor to agricultural GGEs.

Crop production accounts for over 50% of the agricultural contribution through fertilizer use, tillage, and irrigation. However, approximately 70% of grain produced in the United States feeds livestock, adding to agriculture’s overall contribution to GGEs.  So, conservatively, we can estimate that livestock contributes 7.3% of GGEs in the US.

However, we can’t stop there. The food and agriculture industry also uses a meaningful portion of the US transportation system, contributing 27% of GGEs. All that grain and livestock has to be processed through industry and manufacturing, contributing another bucket of US GGEs at 24%. Even without breaking those numbers into industries and categories, we might guess that the livestock industry contributes 12% to 15% of US GGEs.In fact, the The Breakthrough Institute estimates livestock’s GGE contribution to range from  11-17%.

If each of us gave up beef and dairy products  two or three days per week, we could dramatically reduce the US carbon footprint, which would, in turn slow global warming.

Livestock’s Other Environmental Impacts

Water

GGEs are not the only byproduct of this dirty business. Consider the vast amount of water used to feed and raise livestock. A 2016 US Geological Survey report estimated that of 355 trillion gallons used, 2 trillion went directly to livestock and 115 trillion to agricultural irrigation.  Luckily, as of 2022, agricultural water use is now decreasing yearly.

Manure

Let’s talk manure. Based on headcount data from the USDA, the EPA estimates that livestock manure creates 6.1 billion kilos of nitrogen and 1.8 billion kilos of phosphorus per year. This in turn leads to nutrient pollution causing dangerous algal blooms in bodies of water, leading to oxygen depletion and ecosystem disruption. Livestock manure disposal is regulated by the EPA, but still, a portion of that manure leaches into our water systems through surface runoff and infiltration.

Relax! You Don’t Have To Go Vegan To Create Positive Change

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. A growing number of restaurant chains cater to vegetarians and vegans and restaurant chains, like Pret-A-Manger and Chipotle, are increasing their plant-based selections. Many apps can help you find restaurants with good vegan and vegetarian options anywhere in the world.

Remember, you do not have to go 100% plant-based to make a big difference for your health and the environment. Many people are embracing a flexitarian lifestyle, eliminating some animal-based products, but not all of them. In a similar way, you can incorporate ESG investing into your overall investment strategy by investing in sustainable companies promoting healthier foods and food processing.

Start easy by going meatless or vegan one day a week — maybe try ‘meatless Monday.’ Some folks refrain from eating meat before 5 p.m. Still others remove meat and/or dairy from their meals two or three days a week. It is really about finding what works for you. In this way, you make a positive change for yourself and for our planet’s future.

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

We think you’ll also like:

1. Approaches to Green Investing
2. What Kinds of Green Investments Contribute to the Green Economy?
3. Dissecting the Debate Surrounding GMOs

[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Green Symposium
2. Why Green Investing?
3. Tech Talk: What’s Next in Green?

This is an updated version of an article originally published on March 2, 2017, and previously updated on February 11, 2020 and on September 7, 2022. This article was most recently updated by the Financial Poise Editors.] 

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