A coalition of environmental organizations has called on Dutch bank Rabobank to stop funding the world’s largest meat and dairy companies, which they consider to be the most environmentally damaging.
The groups claim that the $5.6 billion in financing provided by Rabobank, including corporate loans and bond issuances, goes against the bank’s climate and sustainability commitments.
The coalition argues that Rabobank’s clients in the industrial livestock sector are major contributors to climate change, deforestation, food insecurity, pandemics, worker exploitation, and animal welfare. The letter sent to the CEO of Rabobank warns that continued funding of meat companies places the bank at financial risk if the Dutch government moves forward with its plan to reduce livestock numbers by 30 percent.
The research conducted by Feedback EU, Feedback Global, World Animal Protection, BankTrack, and International Accountability Project revealed that Rabobank is one of the largest financiers of industrial meat and dairy companies.
JBS, Tyson Foods, Dairy Farmers of America, Fonterra, and Marfrig, five of Rabobank’s clients, are some of the largest livestock companies responsible for a combined 550.8 million metric tons of greenhouse gas emissions in 2021, equivalent to the emissions of the Netherlands and the UK combined.
JBS received the most support from Rabobank with $1.08 billion in corporate loans, $491 million in bond issuances, and revolving credit facilities.
The problem of inadequate emissions reporting is widespread in the meat and dairy industry, with most companies excluding the majority of their supply chain emissions (also known as scope 3 emissions) from their reporting and having poor records in setting emissions reduction targets. Many meat and dairy companies, including those funded by Rabobank, have been accused of delaying climate action and greenwashing their practices. The meat industry has employed similar tactics as the fossil fuel industry to protect their interests.
In 2019, Rabobank became a signatory to the Dutch Climate Agreement, with the goal of reducing GHG emissions by 49 percent by 2030 compared to 1990 levels.
The reduction in farmed animals is part of this effort to reduce nitrogen emissions from animal waste. “Food Transition” is also one of the three main pillars of the strategy outlined in Rabobank’s “Our Road to Paris” report. However, Rabobank has made no commitment to reducing financing for meat and dairy companies, stating that there are still questions about what net-zero means for the agricultural sector.
Rabobank provided a statement, acknowledging the concerns raised by Feedback EU and endorsing the Paris climate goals.
The statement says that the bank will only finance high-emissions sectors if they have scientifically substantiated CO2 reduction targets from 2027 or earlier if required by law. The bank invited the coalition to discuss their concerns.
Environmental campaigners are skeptical that meat and dairy companies can be made greener through plant-based meat alternatives, as many companies view these products as value-added and continue to grow their animal protein business simultaneously. This makes the case for banks to cut ties with these companies stronger, according to Mechielsen. Banks often justify their financing of industrial livestock companies by claiming that they prefer to engage with the companies rather than defund them, but Mechielsen says that these companies show no signs of wanting or being capable of reform.