While banks claim to take climate change seriously, they invest in industries responsible for greenhouse gas emissions. A new study by Profundo, a Dutch research group, and Friends of the Earth analyzes the climate impact of financing agricultural corporations by American banks.
From 2016 to 2023, 58 banks provided the livestock industry with $134 billion in lending and underwriting. More than half of the financing analyzed in the study, Entitled “Bull in the Climate Shop,” the study examined Bank of America, Citigroup, and JPMorgan Chase. The three banks’ financial backing of the livestock industry accounts for 11 percent of the greenhouse gas emissions linked to banks’ financing.
“According to our research, defunding industrial livestock production is one of the most climate-positive choices these banks could make,” said Ward Warmerdam, another study author and Senior Financial Researcher at Profundo.
Industrial Livestock Farming
The Natural Resources Defense Committee (NRDC) defines industrial agriculture as “large-scale, intensive production of crops and animals.” Livestock are often given antibiotics routinely because the animals are kept in overcrowded conditions. Factory farms account for around 72 percent of poultry, 43 percent of egg, and 55 percent of pork production globally.
Feed production and processing, manure storage and processing, and cattle digestion are the primary sources of greenhouse gas emissions from industrial livestock. Agriculture accounts for 10 percent of greenhouse gas emissions in the U.S. Livestock generates almost 15 percent of global greenhouse emissions.
Livestock accounts for 32 percent of global methane emissions, around the same as methane emissions from fossil fuel industries. Methane has a warming potential of 80 times that of carbon. According to the United Nations Environment Program’s Global Methane Assessment, methane emissions should be reduced by at least 30 percent by 2030 to limit the rise in global temperature.
The Big Three Banks and Industrial Livestock
The Big Three banks’ support for meat, dairy, and feed corporations drives greenhouse gas emissions. Financing meat and dairy companies from Bank of America, Citigroup, and JPMorgan Chase accounted for 12.7 metric tons of CO2e of methane emissions. However, Bank of America financed more meat and dairy companies than the other two banks. The underwriting of JBS Foods by Bank of America accounted for 87 percent of its facilitated methane emissions from dairy and meat companies. JBS Foods is a global food company with operations in the U.S., Canada, Mexico, Europe, the U.K., Australia, and New Zealand.
The Big Three banks signed the Net Zero Banking Alliance, committing to “transition the operational and attributable greenhouse gas (GHG) emissions from their lending and investment portfolios to align with pathways to net zero by 2050 or sooner.” Bank of America, JPMorgan Chase, and Citigroup committed to achieving net zero greenhouse gas emissions by 2050. While the big three say they prioritize reducing greenhouse gas emissions from fossil fuel financing, they continue to finance the oil, gas, and coal sectors. They also continue financing industrial livestock production.
Researchers reviewed 58 banks for the study. They found 20.7 million metric tons of carbon dioxide equivalent (CO2e) of methane emissions from the companies receiving loans or underwriting support from the banks, using the GWP100 metric. Methane accounts for almost half (49.6 percent) of the 58 U.S. financing and facilitation emissions from industrial livestock. That amount of methane emissions is more than Uruguay in 2020. When researchers used the GWP20 metric, the figure was 70.3 percent.
Scope 3 Emissions
Many of the banks’ meat and dairy clients do not disclose Scope 3 emissions, where most methane emissions occur. Those that do disclose them use the GWP100 metric for methane emissions. That hides the impact of those emissions on the banks’ carbon footprints and the need to reduce methane.
The big three banks released papers on agriculture that acknowledge greenhouse gas emissions from livestock. According to Bank of America, “Greenhouse gas emissions [from livestock]…exert significant environmental impacts.” Citigroup acknowledged that “the global food system…is responsible for one-third of global greenhouse gas emissions.” JPMorgan Chase admitted that the “methane produced by the agriculture industry is particularly damaging.”
“Banks have committed to pathways to net zero, but they are ignoring a huge ‘cow-shaped hole’ in their plans,” said Monique Mikhail, the study’s lead author and the director of Friends of the Earth’s Agriculture & Climate Finance program. “Big Meat & Dairy exerts a vastly disproportionate impact on the banks’ total emissions, putting their own stated climate commitments at risk.”
