FAIRR’s new Water Risk Monitor finds that 18 livestock companies underestimate supply chain water consumption by a factor of 132.
The cost of water scarcity could rise to US$9 billion annually by 2050 in the worst-case scenario, with a one-in-ten-year drought leading to US$17 billion losses.
Water resilience technologies could save between US$14 billion and US$20 billion by 2050, but investments in nature-based solutions and wider transformation of how water is managed are required to mitigate risks.
18 of the world’s largest livestock companies disclose 1% of their blue water use across the value chain; FAIRR has found that they collectively withdraw as much freshwater as Brazil annually.
(London, 17 August 2026) – The US$95 trillion-backed FAIRR investor network is today publishing research from a new investor tool revealing the agrifood sector is significantly underestimating the financial risks posed by water insecurity. The research is published as the global agrifood industry reels from the impacts of extreme weather – from drought pressures on US cattle hiking beef prices to a 70-year high, to the “flash drought” drying up European river systems.
The report, The Hidden Costs of Water Scarcity in Livestock Companies, examines the impacts of chronic water stress and drought on 18 of the world’s largest publicly listed livestock companies, representing a 20% share of the global livestock market with revenues totalling US$354 billion. The report findings are from the FAIRR Water Risk Monitor, the first tool of its kind to model scenario-based water scarcity risks at a company level.
The research finds that just 18 companies collectively withdraw as much freshwater annually as Brazil or Egypt. Despite their high dependence on water, the companies disclose 1% of value chain blue water use – referring to freshwater in surface or groundwater sources – with five out of 18 companies providing no information on water use at all. Even among companies that disclose blue water use, actual value chain water exposure is on average 132 times higher than reported.
FAIRR estimates the 18 largest listed livestock companies face US$6.4 billion in annual hidden costs from chronic water stress today, equivalent to 2% of revenue on average. These costs include access to alternative water sources, procurement costs for feed inputs and livestock supply, among others. Costs could rise to US$9 billion annually by 2050 under the most pessimistic water stress scenario. A one-in-ten-year drought could drive up to US$17 billion in combined losses by 2050.
Chinese companies are currently most exposed to water scarcity risks, with WH Group and Muyuan Foods facing costs of up to 8% of revenue. Brazilian companies are exposed to the greatest drought-related losses, with JBS facing up to US$4 billion losses in a severe 2050 drought scenario.
Patricia Calderon, Climate and Nature Economist, FAIRR, said:
"Despite the severity of water scarcity, there are large disclosure gaps on company exposure to water risks. Investors need decision-useful data on how water risks affect their portfolios today and in the future.”
“Our report quantifies the financial costs of water risks, and the opportunities to mitigate these, so that agrifood companies and their investors can begin to factor water into investments, risk pricing and future planning.”
The report analyses the opportunities and limitations of water resilience technologies – such as drip irrigation and water recycling. If implemented today, these technologies could generate between US$14 billion and US$20 billion in cumulative savings by 2050. But, once implementation costs are considered, technologies would reduce only 9% of chronic water-stress costs.
To reduce the financial shock created by hidden water costs, nature-based solutions are needed to improve water retention in landscapes; governance levers, such as subsidy reform, are needed to provide investment for water resilience, and financial regulation is required to better integrate the costs and value of water into financial decision-making.
Notes to editor
Media contact
For more information, including interviews and further comment, please contact:
Ino Rousselet, ESG Communications (Part of the Flag Group)
Contact number: +44 77 8614 8010 | e: ino.rousselet@flag.co.uk
About FAIRR
The FAIRR Initiative is a global investor network, founded by Jeremy Coller, with a membership representing US$95 trillion in assets under management. FAIRR works with institutional investors to define the material risks and opportunities linked to intensive animal agriculture and provides investor members with the research, tools and engagements necessary to integrate this information into their asset stewardship and investment decisions. Visit www.fairr.org.
Methodology
Starting from a baseline year of 2024, financial exposure is projected to 2030 and 2050 across three climate scenarios:
Optimistic (low water stress): A net-zero-oriented pathway in which global temperatures are projected to reach between 1.3°C and 2.4°C above pre-industrial levels by 2100. Strong climate policy action, rapid decarbonisation, and reduced resource intensity characterise this scenario. Water stress impacts are relatively contained, though not eliminated.
Business as usual (rising water stress): A fragmented world with moderate-to-high emissions and limited international climate cooperation. Global temperatures are projected to reach between 2.8°C and 4.6°C above pre-industrial levels by 2100. Water stress intensifies significantly, with growing regional competition for freshwater resources and increased drought frequency.
Pessimistic (severe water stress): A fossil fuel-intensive pathway with very high emissions and minimal climate mitigation. Global temperatures are projected to reach between 3.3°C to 5.7°C above pre-industrial levels by 2100. This scenario projects the most severe deterioration in water availability, with widespread chronic stress and more frequent extreme drought events across major agricultural regions.
Step 1: Assessing company water footprints across the value chain
Data from company disclosures or secondary sources is used to calculate the annual volume of feed crops used for animals. This is combined with an assessment of the water consumption at each stage needed to sustain protein production at 2024 baseline levels.
Step 2: Assessing company water risk exposure
Companies’ estimated water consumption from Step 1 are assessed to determine how much is sourced from regions of high or very high water stress, defined as withdrawals 40% greater than the available supply in a watershed. Two types of water risk are assessed:
Chronic water scarcity (2030 and 2050): Feed crop and pastureland water inputs and company slaughterhouse locations are overlaid with water stress data per watershed, weighted by production density, to derive a country-level water stress score. This water stress percentage this produces for each company is applied to 2030 and 2050.
Acute drought stress (2050): A one-in-ten-year drought event dataset is added to the chronic water stress data to capture drought amplification. In already water-stressed regions, drought reduces crop and livestock production. In regions not yet water-stressed, drought drives additional irrigation demand, transitioning a portion of green water to blue water. This produces a combined chronic and acute water stress exposure score for 2050.
Step 3: Estimating financial materiality of water risk
The annual financial impact of water stress exposure is calculated for each company at each value chain stage. Chronic water stress generates ongoing cost increases all stages. Where chronic stress is amplified by acute drought, the financial impact is expressed as a loss, given its stochastic and event-driven nature.
