Is big beef its own worst enemy?
The ingredient list for your average hamburger includes 15 gallons of water, 14 pounds of feed, and 65 square feet of land . Beef is among the most resource-intensive foods out there (Exhibit A). As a result, the industry is subject to enormous risk due to climate change impacts across its supply chain. First, they must adapt to unpredictable availability and cost of feed and water. Second, they must prepare for flooding, drought, natural disasters, and resulting increases in livestock disease  (Exhibit B). As these resource constraints escalate, population growth and increasing meat consumption per capita are projected to drive a 73% increase in global meat consumption by 2050, further exacerbating these challenges [B].
Mitigating climate change impacts is just one side of the equation. Animal agriculture globally accounts for 14.5% of GHG emissions – by some calculations, greater than the global transportation sector  (Exhibit B). Methane emissions from enteric fermentation (cow flatulence) are the main culprit (Exhibit C). Furthermore, cattle is one of four “forest-risk commodities” causing deforestation in the Amazon, producing 15% of global GHG emissions . The result is not just a moral imperative to change – but also real economic consequences. Reputational pressure from end-consumers and regulatory changes like the Paris Agreement create substantial pay-offs for investments in sustainability .
EXHIBIT B 
EXHIBIT C 
Can “beef” and “sustainability” exist in the same sentence? JBS is giving it a try.
JBS, the world’s largest global producer of beef, is vocal about their commitment to sustainability. They have made investments across the supply chain to both mitigate impacts and reduce their environmental footprint, receiving an “A-” sustainability score from Driving Sustainable Economies (CDP) . Their corporate strategy highlights efforts devoted to the prioritization of sustainability initiatives – land management, water use, energy use, and waste are among the highest-priority areas .
JBS regularly invests in operational improvements to optimize logistics, improve energy efficiency, increase use of renewable energy, and meet standards for waste disposal and wastewater treatment . Through their Environmental Management System (EMS), they provide transparency to metrics such as emissions and water usage per output, allowing them to set targets, adjust procedures, and design projects to reach goals . Finally, JBS is engaging the industry on these topics; they are members of the Global, US, Canadian, and Brazilian Roundtables for Sustainable Beef .
Their ‘Cattle Agreement’ with Greenpeace commits to tracing cattle to prohibit sourcing from ranchers associated with deforestation. The ‘New Field’ Program in Brazil promotes sustainable ranching practices, and thus far has produced 5-10% emissions reductions and doubled productivity . Finally, the Carbon Neutral Meat Program in Brazil will design a new livestock – forest integration model . Highly publicized initiatives like these – which intend to improve efficiency and productivity while minimizing environmental impact – are central to their medium-term sustainability strategy.
While JBS’s investments in climate change mitigation appear substantial to date, recent scandals call their credibility into question. This May, an investigation uncovered that JBS Brazil has knowingly and regularly sourced cattle from illegally deforested land for many years .
If that’s not enough… what is?
As a global power-house with a diversified supply chain and ongoing investments in resource efficiency, JBS is well-positioned to weather the short- costs associated with climate change. That is, within the current industry context and business model. But the greatest risk to JBS – and their competitive set – is the mutual exclusivity of future beef production scaled to demand and the 2°C global warming “tipping point.” If the two cannot coexist, either: 1) economic forces will effectively destroy the industry, or 2) the planet will reach a point of catastrophic impact. JBS must move from incremental to transformational change to mitigate this risk. There are several actions JBS can take:
- Commit to substantial R&D investment to drive technological innovations across their supply chain, focusing on maximizing impact. More specifically, seek to develop / adopt pilot, and scale methane capture solutions – an area where JBS has been silent to date. Solutions to dramatically reduce methane emissions from cattle span from “fart bags” to genetic alterations to feed supplements, none of which has been commercialized  (EXHIBIT D).
- Launch industry-wide research initiatives and target-setting through regional and global Roundtables for Sustainable Beef. The industry is highly consolidated and cooperation between leading players can benefit all players by 1) highlighting current best practices, 2) funding research, and 3) painting the industry in a better light.
- Diversify more aggressively by investing in alternative protein sources to hedge against future market shifts. Such products include plant-based meats, insect-based protein sources, and lab-grown (“cultured”) meat products (EXHIBIT D). These solutions mitigate risks associated with feed, water, and land availability and shifting climates. As technologies improve, they may become true replacements. JBS competitors Tyson and Cargill are already hedging by investing in such companies.
“Fart bags” capture methane emissions | Memphis Meats grows beef in a petri dish
JBS is not unique in their predicament. Yet they have ostensibly demonstrated a desire to be “ahead of the curve” in mitigating climate risks and recognizing anticipated economic benefits of adapting. Will the incentives for transformational change be enough to motivate action given the costs – particularly if competitors do not buy in – in a commodity industry struggling to maintain profits?
 “We are killing the environment one hamburger at a time,” Business Insider. http://www.businessinsider.com/one-hamburger-environment-resources-2015-2
 Climate change and livestock: Impacts, adaptation, and mitigation. http://www.sciencedirect.com/science/article/pii/S221209631730027X#f0005
 Global Forests Report 2016, CDP. https://www.cdp.net/en/research/global-reports/global-forests-report-2016
 “How to quantify sustainability’s impact on your bottom line,” Harvard Business Review. https://hbr.org/2017/09/how-to-quantify-sustainabilitys-impact-on-your-bottom-line
 “Sustainable Diets: What you Need to Know,” World Resources Institute. http://www.wri.org/blog/2016/04/sustainable-diets-what-you-need-know-12-charts
 JBS Website: Sustainability. http://jbssa.com/sustainability
 JBS Annual and Sustainability Report, 2016. http://jbss.infoinvest.com.br/enu/4070/JBS%20RAS%202016%20EN%20170502%20Final.pdf
 “Brazil’s JBS accused of violating Amazon rainforest protection laws,” Reuters. https://www.reuters.com/article/us-brazil-environment-cattle/brazils-jbs-accused-of-violating-amazon-rainforest-protection-laws-idUSKBN1722O1
 “Livestock – Climate Change’s Forgotten Sector: Global Public Opinion on Meat and Dairy Consumption,” Chatham House. https://www.chathamhouse.org/publication/livestock-climate-change-forgotten-sector-global-public-opinion-meat-and-dairy?dm_i=1TY5%2C30JL0%2CBHZILT%2CAUGSP%2C1