Overview
Water is among the most financially material yet systematically underpriced natural resources underpinning global food systems. As climate change and ecosystem degradation intensify chronic water stress and drought, companies and investors in the livestock sector face mounting exposure that is not yet reflected in disclosure, valuations, or capital allocation decisions.
This report uses FAIRR's Water Risk Monitor model to quantify the water footprints and hidden financial costs of water scarcity for 18 of the world's largest publicly listed livestock companies across Australia, Brazil, China, France, and the United States. The model assesses financial exposure in 2024, 2030, and 2050 across three IPCC-aligned climate and socioeconomic scenarios and identifies how companies and investors can build water resilience through engagement, investments, and systemic advocacy.
More information about how the Water Risk Monitor model was developed can be found in the Methodology.
The findings of this report can help investors:
quantify the hidden water scarcity costs embedded in procurement, operational and capital expenditures across livestock company value chains and assess how these costs are projected to grow under different climate scenarios;
identify which companies and geographies carry the highest concentration of water risk exposure relative to revenues;
understand the financial opportunities and limits of technology-based mitigation and the case for systemic, watershed-level interventions; and
develop their stewardship activities and company-level engagement on water risk disclosure, target-setting, and adaptation planning.
Report Highlights
Five out of 18 modelled companies have disclosed no water use data across their operations or supply chains.
Companies that do disclose tend to underreport - disclosing around 1% of their estimated blue water use across the value chain on average.
In the 2024 baseline year, the 18 modelled livestock companies collectively faced US$6.4 billion in hidden water scarcity costs, representing 2% of total reported revenues on average.
Chinese companies face the highest cost concentration, with some incurring up to 8% of revenues in water costs.
Under pessimistic scenarios, companies’ collective chronic water scarcity costs could reach US$9 billion per year by 2050.
A one-in-ten-year drought in 2050 could generate combined losses of up to US$17 billion across all companies.
If water-resilient technology investments are made from today, the average savings per company would reach over US$1 billion by 2050.
Downloads
Main report and Executive summary
Analysis of how water stress translates into financial risk for livestock companies and their investors
Company-level findings on water risk exposure by geography, value chain, and protein type
Key considerations for investors
Model dataset and engagement questions
Water footprint estimates by value chain stage (grain and feed production, animal raising, and animal processing and packaging) for all 18 companies, with blue and green water breakdowns
Interactive dashboards enabling company-by-company comparison across scenarios and years
Company-level financial exposure to chronic water stress and drought, including projected cost increases and EBIT margin impacts for 2030 and 2050 across three climate scenarios
Suggested engagement questions to support water-focused stewardship activities
Written by
Research Manager
Climate and Nature Economist
Technical Specialist, Climate and Nature
