Introduction

The report positions livestock methane as a material financial and climate risk for food companies and their investors. Methane is a highly potent greenhouse gas, and for companies sourcing dairy, beef and pork it often represents a significant share of total emissions. Near-term methane mitigation is framed as a practical lever to strengthen supply chain resilience, manage regulatory and reputational risk, and protect long-term value.

The outsized opportunity of reducing methane in the food sector

Methane has more than 80 times the warming potential of carbon dioxide over a 20-year period and a short atmospheric lifetime of around 12 years. This means reductions can deliver rapid climate benefits. Agriculture is the largest source of global methane emissions, with livestock accounting for around 32%, primarily from enteric fermentation (27%) and manure management (4.8%). Within food sector emissions, methane contributes roughly 21%, making it a high-impact target for near-term action.

Business case for addressing livestock methane

Addressing livestock methane is presented as a clear business imperative. Operational risks include reduced animal productivity, feed disruption and higher mortality from heat stress, droughts and extreme weather. Regulatory risks are increasing as governments introduce policies such as methane reduction mandates, carbon pricing and subsidies for low-emissions farming, with examples including California’s dairy methane regulation and Denmark’s agricultural carbon tax.
Reputational and litigation risks are rising as investors, consumers and civil society scrutinise emissions claims and climate disclosures, including lawsuits over misleading net zero commitments. Market risks include loss of market share and supplier contracts as downstream companies set Scope 3 targets. Conversely, companies that act early can improve resilience, manage costs and strengthen competitiveness.

Identifying companies with exposure to livestock methane in their supply chains

Methane exposure varies across the food value chain. Packaged foods and meats companies focused on beef, dairy or pork face the highest exposure, as methane can represent a large share of Scope 3 emissions and these firms often have direct control over farming practices. Companies with more diversified product portfolios face medium exposure.
Food retailers and restaurants typically have medium to medium-high exposure due to meat and dairy sales, with methane materially affecting their total supply chain footprint. Understanding these differences helps investors and lenders prioritise engagement with companies facing the greatest methane-related financial risk.

Strategies for reducing methane emissions in the food supply chain

The report outlines three core steps. First, companies should assess and disclose emissions across Scopes 1, 2 and 3, disaggregated by gas and commodity, and set total and methane-specific reduction targets.
Second, methane should be embedded within Climate Transition Action Plans (CTAPs), linking targets to concrete actions.
Third, companies should implement sector-specific solutions across supply chain engagement, innovation and policy advocacy.

Assess methane emissions

Robust accounting enables companies to identify high-methane commodities such as dairy, beef and pork. Case examples show methane accounting for around 25% of Danone’s total emissions and 34% of Nestlé’s ingredient sourcing emissions, demonstrating materiality. Setting science-based targets and tracking progress is emphasised.

Address methane within a CTAP

CTAPs should include methane-specific actions, timelines and accountability. Initiatives such as the Dairy Methane Action Alliance illustrate collective approaches where companies commit to disclosure and action plans focused on methane.

Engage the supply chain

As Scope 3 emissions often exceed 95% of total emissions, supplier engagement is critical. Existing technologies can cut cattle methane by 15–20% through improved feed, manure management and productivity gains. Companies are encouraged to provide financial incentives, cost-sharing models, long-term contracts and premiums for low-methane products to support farmer adoption.

Accelerate innovation

Further innovation is required to meet a 30% global methane reduction by 2030 and 50% by 2050. The report highlights investment in feed additives, manure technologies, alternative proteins and public-private research partnerships as pathways to scale reductions and create competitive advantage.

Advocate for public policy

Supportive public policy can reduce costs and accelerate adoption. Companies are encouraged to advocate for improved methane measurement, financial support for mitigation, research funding and streamlined approval processes, and to align trade association lobbying with their climate goals.

Engaging companies

For investors, structured engagement questions are provided to assess corporate preparedness, covering methane disclosure, supply chain action, innovation strategies and policy advocacy. This enables more informed stewardship and risk management.