Campaigners have taken aim at the World Bank for channelling billions of dollars annually into the expansion of factory livestock farming in developing countries, saying this capital should instead go towards regenerative practices that help preserve biodiversity.

The World Bank Group has an outsized role in financing factory farming, investing $1.5 billion in animal agriculture in 2023, acording to analysis of 15 development banks by US-based organisation Stop Financing Factory Farming (S3F).

More than three-quarters (76.7%) of all the banks’ 2023 projects focused on industrial animal agriculture, while only 6.7% supported non-industrial activities, the analysis said.

In response to the paper, the World Bank told Carbon Pulse the IFC finances projects that help its clients build environmentally sustainable businesses, which improve animal welfare standards.

Besides, livestock farming plays a vital economic role in emerging markets while providing diversity of food sources for consumers, it said (see full response further down).

Total investment value (in billion US dollars) of direct animal agriculture support by development banks in 2023. Source: S3F

Industrial animal agriculture involves large-scale single crop growth of soy and corn for feed, and the development of animal feeding operations. The food industry has the highest biodiversity impacts of all sectors, a study of 2,300 companies led by the Finance for Biodiversity Foundation found earlier this month.

Through investments, advisory services, or policy loans, development banks are contributing to the growth of animal agriculture, including factory farming, the S3F report said.

“Livestock production can play a role in meeting the nutritional and economic needs of the populations whom development banks serve.”

“However, the decades-long industrialisation and globalisation of the sector has driven the overconsumption of animal-based foods in higher income countries, while the diversion of resources toward feeding animals instead of humans has exacerbated food insecurity among populations in lower and middle-income countries,” the non-profit argued.

Support for animal agriculture was geographically diverse in 2023, with Latin America and Sub-Saharan Africa receiving the most investment. Honduras and Kenya had the highest number of projects.

Approximately 55% of the financing analysed supported private sector livestock operations, while the remainder went to government-led initiatives.

WORLD BANK RESPONSE

Although the World Bank Group’s overall investment in animal agriculture was by far the largest, its proportion of portfolio projects supporting the sector was broadly in line with the average.

In response to the S3F paper, a World Bank spokesperson said: “Livestock plays a vital economic role in emerging markets, supporting the livelihoods of approximately 1.7 bln poor people, with 70% of the sector’s workforce women.”

​“It provides diversity of food sources as well as the high-quality protein and essential micronutrients vital for normal development and good health, especially within vulnerable or remote communities.”

“We work with clients to reduce GHG emissions and to make their operations more efficient, reducing the demand on resources and the climate impact of these industries.”

REGEN AG

The snapshot of development bank investments raises questions about the types of agricultural operations the institutions should support, and their role in transforming food systems, S3F said.

The non-profit called on the banks to shift their support towards regenerative agriculture that benefits the environment, biodiversity, and local communities.

On Thursday, a coalition of organisations including WWF launched a report on the role of integrating a food system aligned with people and nature into National Biodiversity Strategies and Action Plans (NBSAPs).

The document offers guidance on incorporating agroecology into NBSAPs, in line with the Kunming-Montreal Global Biodiversity Framework.

The S3F report was based on financial disclosure data gathered by Early Warning System from webpages. The financial value of projects may be underestimated due to limited information, technical errors, and disclosure timing issues, the company said.

By Thomas Cox – t.cox@carbon-pulse.com

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