New Study: Climate Risks Could Drive $5.4 Trillion in Losses for Global Meat, Dairy, and Feed Corporations by 2050
Bank of America, Citigroup, and JPMorgan Chase also face climate-related financial risks associated with their industrial livestock-related lending and investingAMSTERDAM – Just 31 of the world’s largest corporations involved in meat, dairy and feed production face up to $5.4 trillion in long-term risks by 2050, with near-term risks reaching $116 billion by 2030, according to a new report released today by Profundo, a Netherlands-based sustainability research group. These staggering figures, driven by these corporations’ exposure to climate-related disruptions, regulatory shifts, and market volatility, raise significant challenges and considerations for financial institutions lending to and/or investing in them.
The study estimates climate-related financial risks for Bank of America (BofA), Citigroup (Citi), and JPMorgan Chase (JPMC), the three largest U.S.-based lenders to the 31 meat, dairy and feed corporations reviewed for the report. Using financial data from 2016 to 2023 and climate scenario modeling, researchers calculated risks to the “Big Three” banks in the near-term (to 2030) and long-term (to 2050). Researchers considered variables such as deforestation impacts, methane and other GHG emissions, water scarcity, and weather volatility-related risks in key supply chain regions.
The study finds:
- Near-term financial risks (to 2030): $116 billion in losses for the 31 meat, dairy and feed corporations, exposing $0.43 billion to $1.12 billion in loans and investments held by BofA, Citi and JPMC.
- Long-term financial risks (to 2050): The 31 meat, dairy and feed corporations reviewed for the report face between $536 billion and $5.4 trillion in losses, which would significantly erode or wipe out their combined $725 billion in equity value and $932 billion in enterprise value.
- In the long term, BofA, Citi and JPMC face financial risks ranging from $2.5 billion to $9.3 billion of their $10.4 billion in outstanding financing to the 31 meat, dairy and feed corporations.
“This analysis highlights the opportunity for financial institutions to reduce long-term financial risks through reducing their investments in the meat, dairy and feed sector,” said Gerard Rijk, senior equity analyst at Profundo, who was one of the lead researchers for this study. “The analysis and the numbers are a wake-up call: continued investment in this unsustainable industry creates very high externalized climate damage costs as well as potential high cash costs. These hurt the planet as well as the portfolios of banks and asset managers.”
“Financial institutions must act swiftly to mitigate these risks by shifting capital toward more sustainable food systems,” added Kelly McNamara, senior research and policy analyst at Friends of the Earth U.S. “The tools to redirect investments toward environmentally sustainable practices that benefit consumers, the climate and the global economy are already within our reach. The real question is: do major financial institutions have the will to use them?”
Supported by Friends of the Earth U.S., Financing meat, dairy and feed production: Bank of America, Citigroup, and JP Morgan Chase face financial risks calls on banks to incorporate environmental risks into financial decision-making and to prioritize funding for sustainable agricultural practices. It builds on a 2024 Profundo and Friends of the Earth U.S. study, Bull in the Climate Shop, that found financing meat, dairy, animal feed, food processing and agri-commodity corporations has an outsized impact on the Big Three banks’ financed emissions, accounting for just 0.25% of the banks’ total loans outstanding but roughly 11% of their reported financed emissions.
As the report released today points out, “The data is clear: climate risk is financial risk. By significantly curtailing or ending financing to a small number of high-emitting companies in the agricultural sector, BofA, Citi and JPMC and any other lenders or investors in the sector can limit exposure to climate-related losses and make significant progress on their net zero commitments.”
For more information, you can find the full report, Financing meat, dairy and feed production: Bank of America, Citigroup, and JP Morgan Chase face financial risks here.
Contact: Kelly McNamara, [email protected]