US banks ‘sabotaging’ own net zero plans by livestock financing, report claims

Lending to meat, dairy and feed corporations led to ‘significant proportion’ of banks’ emissions, Friends of the Earth found

American banks are “sabotaging” their own climate commitments by financing meat, dairy and feed corporations, according to a report.

The report analysed funding from 58 US banks to animal protein and feed companies in the form of loans and underwriting, such as share and bond issuance guarantees.

“Banks have committed to pathways to net zero, but they are ignoring a huge cow-shaped hole in their plans,” said Monique Mikhail, the lead author of the report and director of the agriculture and climate finance programme with Friends of the Earth, an NGO.

In emissions terms, the report links more than 24m metric tonnes of CO₂ – about equal to the annual exhaust emissions from 5m cars – to animal protein and feed company financing by what it calls the “big three” livestock lenders: Bank of America, Citigroup and JPMorgan Chase.

Livestock-linked financing by all 58 banks totalled more than $134bn between 2016 and 2023, the report found, with more than half of that, about $74bn, coming from the top three financiers.

“We weren’t expecting to see the banks sabotaging their own climate commitments to this level,” Mikhail said, adding that eliminating livestock and feed financing was “one of the most effective, climate-positive choices US banks can make”.

Bank of America, Citigroup and JPMorgan Chase have all committed to reducing the emissions linked to their client financing, and to reaching net zero by 2050, meaning any ongoing emissions are to be balanced by removal projects.

Mikhail said that while “the central fact in the report is that [proportionally] a very tiny part, only a quarter of a per cent, of the big three banks’ lending portfolio goes to meat and dairy and feed companies”, that lending led to a significant portion of their total reported emissions.

The report further warns that the “extent of meat, dairy and feed corporations’ contribution to the banks’ GHG emissions footprints may remain obscured”, even to the banks themselves, because animal protein and feed companies “commonly underreport their emissions”.

Financial institutions, the report said, “widely acknowledge that full GHG disclosures … are critical for making good financial decisions, yet only 22% of [meat, dairy and feed] companies reviewed for this report disclose scope 3 emissions [and] 56% do not report emissions at all”.

Scope 3 refers to indirect emissions from activities related to a company or organisation. For livestock, dairy or feed companies, deforestation was a significant scope 3 emission, said Mikhail. “When you look at meat, dairy and feed companies, scope 3 emissions can be over 90% of their total emissions. For [the Brazilian meat corporation] JBS, scope 3 is up to 97% of their total climate footprint,” she said, referencing the report’s findings.

More broadly, the report found that banks’ financing of animal protein companies such as JBS, estimated to be the world’s highest-emitting livestock company, was enabling their continued expansion and posing “a critical threat” to the Paris agreement goal of keeping global warming to 1.5C (2.7F) above preindustrial levels.

In March, an international survey of experts found that eating less animal protein and farming fewer animals, especially in richer countries, was the best way to reduce livestock emissions.

To calculate bank financing of animal protein and feed companies, the report used information from financial databases, company reports, publications and filings, and media and analyst reports. Between January 2016 and March 2023, the 58 US banks provided financing, credit or underwriting services to at least one of 29 of the livestock or feed corporations included in the analysis.

To calculate emissions from the top meat, dairy and feed companies, the report looked at direct scope 1 and 2 emissions and at indirect scope 3 emissions.

Bank of America, Citigroup and JPMorgan Chase declined to comment on the report. JBS, the International Meat Secretariat, the International Dairy Federation and FEFAC, a feed manufacturer association, did not respond to the Guardian’s requests for comment.

Cover photo: Banks are ‘ignoring a huge cow-shaped hole in their plans’, said the lead author of the report. Photograph: Adam Davis/EPA