The publication outlines how between 2015 and 2021, Rabobank provided extensive financial services to organizations such as JBS, Marfrig, Tyson Foods, Dairy Farmers of America, and Fonterra, including a total of $1.941bn in corporate loans, underwriting $1.221bn in bond issuances and providing revolving credit facilities.
The financial data referenced in the Feedback EU report is based on two datasets commissioned by Feedback EU from not-for-profit research firm Profundo, utilizing Refinitiv, Bloomberg, IJGlobal, Trade Finance Analytics, company publications, company registers and media archives to identify financial relationships.
A group of organizations, including Feedback EU, Feedback Global, World Animal Protection and BankTrack have called on Rabobank to urgently stop financing big livestock companies. In a joint letter to the bank’s CEO, the group highlights that continued exposure to large scale industrial livestock companies will damage Rabobank’s reputation and business, including risks of lost revenue and stranded assets.
“In direct contradiction with its commitment to the goals of the Paris Agreement, the Dutch Climate Agreement and Commitment to Sustainable Agriculture and Forests, Rabobank is currently one of the world´s biggest financial backers of industrial livestock companies,” they said.
JBS, Marfrig, Tyson Foods, Dairy Farmers of America and Fonterra – combined generated an estimated 550.8 million tons of greenhouse gases (GWP100) in 2021, together emitting nearly as much as the total emissions of the Netherlands and the UK combined, said the campaigners.
They cited a €25bn plan, announced by the Dutch government in 2021, to reduce livestock numbers by 30% by 2030 to comply with EU nitrate regulations.
“In October 2022, the Dutch Parliament passed a motion which will require financial institutions to manage credit risks as a result of stranded assets, meaning that they have an obligation to bear losses arising from these types of credit risks themselves.
“If the Dutch government goes on to adopt the motion and develop specific policies, Rabobank will need to write off a substantial part of its loan portfolio, unless it takes action to reduce its exposure to industrial livestock companies. This highlights the significant regulatory risks Rabobank is exposed to by continuing to provide finance to industrial livestock companies," noted the organizations.
If Rabobank intends to continue financing these companies, they said they would welcome an explanation of how such a decision can be compatible with staying within safe levels of climate change and achieving zero deforestation, whilst safeguarding animal welfare.
Rabobank emailed FeedNavigator its statement in response to the claims in the report:
“Rabobank endorses the Paris climate goals. Our goal is to help all customers [to go] from here to greener. If customers do not comply with our sustainability requirements, we discuss this and, as a bank, we can reconsider the financial relationship with a client if there are no changes regarding our climate policies.
"Feedback EU raises important concerns, and we would like to refer them to our climate report, in which we describe how we want to help the sectors with the most emissions to meet the climate goals. It states, for example, that from 2027, or earlier if required by law, we will only finance customers in sectors with high emissions if they have scientifically substantiated CO2 reduction targets. We invite the senders of the letter to discuss this."
Financiers ‘gripped by inertia’
A report from Changing Markets Foundation, published last year, maintained that the investment community recognizes the risks of climate change but is gripped by an inertia that prevents action.
That organization is calling on financial institutions and actors in the finance sector to engage with the meat and dairy industry and ensure that it begins its transformation by radically reducing its carbon and methane emissions.
Actions investors can take range from requesting companies to report and reduce methane emissions to supporting the growth of genuinely sustainable alternative protein and better food production practices, said the authors.
And Global Canopy’s Forest 500 report, released in January 2021, found that banks, asset managers, pension funds and insurance companies can have huge influence over the global supply chains driving deforestation. The report argues that financial institutions that are serious about climate change should set policies covering all key commodities, monitor and engage with companies to drive progress on deforestation, and divest from those which fail to act.