Banks Are Ignoring Methane From Meat and Dairy — And It’s Undermining Climate Finance

When banks announce net-zero commitments, they rarely mention the cows. A new report by Planet Tracker reveals a striking blind spot in climate finance: the vast majority of banks with greenhouse gas reduction targets fail to account for methane emissions generated by the meat and dairy companies they finance. As methane — a greenhouse gas roughly 80 times more potent than CO₂ over a 20-year period — continues to rise from agricultural supply chains, this oversight is no longer a technicality. It is a systemic failure with real climate consequences.

The Methane Gap in Agricultural Finance

The Planet Tracker report makes clear that supply chain sustainability remains poorly integrated into how financial institutions assess the climate impact of their agricultural portfolios. Most banks focus their emissions accounting on energy use and direct operational carbon — largely ignoring Scope 3 emissions, which include methane from livestock digestion and manure management. Yet agriculture accounts for roughly 10–12% of global greenhouse gas emissions, with livestock responsible for the lion’s share.

From a European perspective, this matters enormously. The EU’s Farm to Fork Strategy and the Corporate Sustainability Reporting Directive (CSRD) are pushing companies — and increasingly, their financiers — toward full supply chain emissions disclosure. But voluntary bank commitments are lagging behind regulatory ambition. If European banks continue to fund meat and dairy expansion without methane accountability, the continent’s broader climate targets risk being quietly undermined by the very institutions meant to accelerate the green transition.

The food system is one of the largest drivers of planetary breakdown. Closing the methane gap in finance is not optional — it is central to any credible climate strategy.

Innovations Pointing Toward Solutions

While the banking sector stumbles, innovators across the sustainable agriculture and agtech space are moving faster. Several developments this week illustrate the breadth of solutions now entering the market:

• CH4 Global has begun large-scale production of methane-reducing feed additives for livestock — a science-backed intervention that can cut enteric methane emissions from cattle by up to 80% in some trials. This is precisely the kind of bio-solution that banks should be incentivising through their lending criteria.
• Mars and Ofi have launched a five-year regenerative agriculture project in Ecuador targeting cocoa production, aiming to reduce the carbon footprint across the supply chain. The initiative reflects a growing corporate recognition that agroecology and regenerative practices are not niche idealism — they are operational risk management.
• Bonsai Robotics secured $15 million to develop automated fruit harvesters, addressing both labour shortages and resource efficiency in crop production — a reminder that agtech innovation supports the broader shift toward more resilient food systems.
• In the United States, Farmers Business Network (FBN) and the Walton family have introduced pilot farmland loans that financially reward regenerative agriculture practices, offering a model that European agricultural banks and the European Investment Bank could learn from.

What This Means for Europe’s Food and Climate Agenda

Europe stands at a crossroads. The political backlash against the Farm to Fork Strategy — driven partly by farmer protests in 2024 — has slowed some regulatory ambitions. Yet the underlying science has not changed. Methane from livestock remains a critical lever for near-term climate action, and plant-based protein diversification, alongside regenerative livestock management, remains essential to reducing agriculture’s climate footprint.

The challenge is alignment: between what banks finance, what farmers are incentivised to do, and what food companies commit to in their sustainability targets. Right now, those three systems are not speaking the same language. Initiatives like the EU Taxonomy for Sustainable Finance could force greater coherence — but only if agricultural methane is explicitly included in disclosure requirements for financial institutions.

Citizens, too, have a role. Consumer demand for transparency in food supply chains is growing, and platforms tracking the sustainability credentials of food brands are becoming mainstream. Pressure from below can accelerate what regulation from above is still building toward.

Key Takeaway

The Planet Tracker report is a wake-up call: climate finance cannot be credible if it ignores the methane flowing through agricultural supply chains. The good news is that solutions — from feed additives to regenerative farming loans to precision agtech — already exist. What is missing is the financial architecture to scale them. Europe has the regulatory tools and the political mandate. The question is whether its banks will act before the next reporting cycle, or wait to be told they must.