Risk factors explained

Greenhouse Gas Emissions

Livestock production is highly exposed to regulatory and economic impacts as the world implements the Paris Agreement.

Key stats

72
%
of Index companies rank as ‘high risk’ in this category.
32
%
of Index companies have a target to reduce GHG emissions.
1
/60
Aquaculture firm SalMar is the only company to achieve full scores on GHG emissions.

Livestock production represents 14.5% of all global anthropogenic GHG emissions and the sector is therefore highly exposed to regulatory and economic impacts as the world implements the Paris Agreement to keep global temperature rises below 2°C.

Examples of such exposure include the reliance of intensive farmers on corn and soy-based feed, which can contribute to both deforestation and high methane emissions, and the potential for more extreme weather to affect livestock. A recent report by the UN Food and Agriculture Organization (FAO) found that extreme weather events caused $96 billion of damage to lost crops and livestock production, in developing country agricultural sectors from 2005-2015.

Providing comprehensive GHG disclosure is a critical first step for companies in managing climate risk. Without processes to measure and reduce GHG emissions, companies cannot develop meaningful climate adaptation and mitigation strategies.

Other findings in this risk category:

  • Aquaculture companies received the highest average scores on this risk factor.
  • 87.5% of beef and dairy companies failed to indicate basic management and disclosure of this risk factor. Only three ranked as low risk.
  • All Chinese beef or dairy processing companies in the Index were assessed as ‘high risk’ due to little or no disclosure of carbon emissions.
  • SalMar, one of the world’s largest producers of farmed salmon, was the top performing company in this category. Among land-based protein companies, Marfrig, a Brazilian beef producer, displayed best practice in its GHG strategy and reporting.

*Companies with ‘multiple’ proteins derive significant revenues from more than one protein source.