FAIRR Forecasts US$24 Billion Livestock Losses from Climate Costs

ESG investor network the FAIRR Initiative has estimated that half of the largest listed livestock companies could lose up to US$24 billion due to climate-related costs. The firm has launched an enhanced iteration of its Coller FAIRR Climate Risk Tool, which provides investors with company-level data on how climate risks may impact costs and profitability in the meat and dairy sector. The tool forecasts a US$23.7 billion (7%) total decrease in earnings before interest and taxes in 2030 compared to 2020 levels for 40 of the largest livestock producers, which would push half of these into net operating losses. Potential hits to profits are driven largely by an increase in climate-related costs which are forecast to rise by over 9% on average. Climate change will impact agricultural production, contributing to higher feed prices which account for 5% of the cost rise, with expected carbon taxes on emissions from livestock production making up 4%. Only 11 of the 40 companies have disclosed how they plan to mitigate risks from rising feed costs through either data tracking, sourcing diversification or substituting alternative feed ingredients, while just six have published a climate scenario analysis. Jeremy Coller, Chair and Founder of FAIRR, said: “These figures highlight the urgent need for meat companies to adapt swiftly, or pay the financial price with investors increasingly not willing to bear the financial risk of investing in these companies.”

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