FAIRR Report Reveals Financial Risks of Industrial Animal Agriculture for Banks - How Factory Farm Finance May Impact Your Money
A major new report by the FAIRR Initiative reveals significant, unresolved risks across the global industrial animal agriculture sector, impacting banks, investors — and everyday customers whose deposits help finance the industry.
FAIRR’s “Taking Stock Of Industrial Animal Agriculture: The Macro Trends Shaping The Global Food Supply Chain” examines the world’s 60 largest listed protein producers, providing a snapshot of both progress and persistent dangers in climate, nature, antibiotics, social impact, and protein diversification.
Risks Are Falling — But Still Alarmingly High
The research finds that:
While more companies now have a low overall risk rating (nearly 20% in 2024, up from 7% in 2019), almost half of major producers remain high risk due to weak management on deforestation, water use, pollution, and working conditions.
Companies rated high risk for climate have dropped from 77% in 2019 to 43% in 2024, yet the sector is still a major contributor to global emissions and ecosystem destruction.
Concerns on antibiotics stewardship, crucial for preventing antimicrobial resistance (AMR), are on the rise again: 58% of companies are now ranked high risk, reversing previous progress.
Financial Impact: A Looming Crisis for Banks and Investors
These risks are not just theoretical. Unmanaged environmental and social impacts are increasingly translated into financial losses for protein producers and their financial backers. Global banks and investors have poured billions into these companies, often using ordinary customer deposits as the basis for loans and investments.
Failures in supply chain transparency and risk management expose banks to:
Rising regulatory penalties as governments target pollution, biodiversity loss, and climate impacts
Reputational damage and asset devaluation from association with unsustainable practices
Litigation liability on human rights and animal welfare issues
Regulators and campaigners warn that unless banks address these systemic exposures, entire portfolios are at risk - and customers may unknowingly support these damaging activities through their choice of bank.
A Pivotal Moment for Global Food Systems
As climate deadlines for 2030 approach, the agri-food sector is at a crossroads. FAIRR’s report calls for urgent action by capital markets and banks, with stronger criteria on climate, nature, social issues, and protein innovation.
To protect the environment and your finances, demand transparency from your bank and support change for a fairer food system.
Many banks are already taking action against factory farming and refuse to provide any finance to the sector, including Nationwide, the Co-operative Bank and Triodos.
However, other banks continue to provide billions of dollars in finance to factory farming every year, worsening the climate crisis, destroying nature and rapidly amplifying financially material risks. In the years between the signing of the Paris Agreement and 2022, Barclays, HSBC, Santander, Lloyds, Natwest and Standard Chartered provided $77 billion in financing to the world’s largest companies involved in factory farming.
With over 75% of protein producers still failing to adequately assess supply chain risks, banks have the chance and responsibility to lead the transition to safer food financing.
What Should Banks and Customers Do?
Customers play a critical role in making the financial sector work for nature, not against it, as your money may be supporting factory farming if your bank offers finance to these companies.
Bank for Nature’s tool tells you if your bank is nature-friendly or if it finances factory farming. It also lets you send a direct message to them and helps you find more sustainable, environmentally-friendly banks.