About this report

This report investigates the overlooked financial implications of water scarcity, specifically chronic water stress and drought, for 18 of the world’s largest publicly listed livestock companies. These entities represent a 20% share of the global market, with collective revenues totalling US$354 billion as of May 2026. The research evaluates the effectiveness and limitations of technology-based solutions and stresses the importance of multi-stakeholder collaboration to drive water resilience across landscapes.

Introduction

Water is a fundamental resource underpinning every industry, with approximately 60% of global GDP (US$58 trillion) estimated to be highly dependent on its access. Within the ~US$9.77 trillion food and beverage sector, companies and investors are significantly exposed to financial risks from chronic water stress. Projections suggest that demand for water will exceed global supply by 40% by the end of the decade, and food security for 10 billion people by 2050 will depend on the alignment of production with available resources.

Water risks in livestock production

Agriculture consumes roughly 70% of global freshwater withdrawals, with livestock production accounting for 30-40% of this use. The sector is a major contributor to environmental degradation, responsible for up to 20% of global greenhouse gas emissions and acting as the largest driver of deforestation. Feed crops, such as soy and maize, are critical components of intensive livestock farming and are highly dependent on both blue and green water. Currently, 52% of the blue water used for irrigation globally is sourced from unsustainably managed supplies where consumption exceeds renewable levels.

The hidden costs of water scarcity

A substantial “disclosure gap” exists in the sector; while the 18 modelled companies withdrew as much freshwater as Brazil does annually in 2024, they disclosed an average of only 1% of their blue water use across the value chain. Modelled estimates indicate that reported blue water footprints underestimate total consumption by an average factor of 132x. In a baseline 2024 scenario, these companies face US$6.4 billion in annual costs from chronic water stress, representing 2% of total reported revenues. This exposure is concentrated in China, where companies like WH Group and Muyuan Foods face estimated costs of up to 8% of their revenue.

By 2050, average costs are projected to increase by 5.66x in a pessimistic climate scenario. Acute shocks, such as a one-in-ten-year drought, could trigger single-year losses of up to US$17 billion. Brazilian companies, such as JBS and Marfrig, are particularly vulnerable to drought-amplified stress due to their heavy reliance on rainfall for pasture and feed production. In France, poultry producer LDC could see costs rise by 60.31x as water stress doubles across agricultural regions by 2050.

Pathways towards adaptation and resilience

Strategic investments in technologies, including drip irrigation and water recycling, are estimated to save up to US$1 billion per company on average by 2050. Total modelled savings could range between US$14 billion and US$20 billion. However, once capital and operational expenditures are considered, these technologies would only mitigate 9% of estimated chronic water-stress costs. Systemic resilience requires significantly increased capital flows to restore water ecosystems and the development of effective international collaborative governance.

Investors are encouraged to engage portfolio holdings to set time-bound, science-based targets and monitor progress through frameworks such as the Taskforce on Nature-related Disclosures (TNFD). Repurposing the US$635 billion currently allocated to harmful agricultural subsidies that drive overextraction and pollution is also highlighted as a critical step toward sustainable agriculture.

Conclusion

Escalating water stress generates material financial risks that can compress operating margins and threaten business continuity. These risks cascade across supply chains, impacting feed yields and livestock supply. Proactive investors are well-positioned to manage this exposure by supporting companies in building resilience and advocating for broader systemic transformation across the food sector to ensure long-term investment value.