Investor Statement in Support of Ending Extractive Agriculture

Background:

As investors, we issue this statement demanding an end to extractive agricultural practices.

As a set of practices and business models that directly harm our planet, deplete natural resources, and endanger people, extractive agriculture poses one of the biggest obstacles to climate justice and sustainability. It is impossible to meet climate justice or sustainability goals without addressing extractive agriculture, as its unsustainable methods exacerbate environmental degradation, social inequity, and economic instability.

Extractive agriculture is a subset of industrial agriculture. It is characterized by the extreme dominance of only a few companies that control the global food and feed supply chain, and whose business models directly drive biodiversity loss, excessive greenhouse gas emissions, elimination of smallhold farms, abuses of farm workers, the proliferation of toxic and carcinogenic chemicals, topsoil loss, and other harms. It has proven to be destructive for our planet, harmful for people and communities, and an unnecessarily costly and inefficient approach to food production. Beyond its direct and catastrophic effects on our environment, communities, and economies, extractive agriculture is associated with antitrust, worker safety, human rights- and gender-related hazards; and is drawing mounting legislative, regulatory, and public scrutiny that may pose additional financial risk.

We issue this investor statement to urge companies to end the harmful practices of extractive agriculture, both to foster a more sustainable, just, and equitable future for all, and in the direct interests of their shareholders and the broader economy.

Material Concerns & Risks for Investors
Despite growing awareness of the harms propagated by extractive agriculture, public markets have so far failed to disclose or price the associated risks.  

Investors have the right, and fiduciaries have the responsibility, to act on all legitimate, material, publicly available information regarding an investment’s material facts. We believe investors should take action to reduce exposure to extractive agriculture’s harms, risks, and unpriced costs in their portfolios.

1. Inability to Achieve Net-Zero, Sustainability, Biodiversity, & Food Security Commitments:

• Through increased greenhouse emissions, excess energy use, land loss, biodiversity loss, and other mechanisms, extractive agriculture undermines all major climate goals. It also causes land degradation, leading to food insecurity for approximately 2.4 billion people globally.¹ 
• United Nations’ Sustainable Development Goal 13¹ emphasizes urgent climate action, which is unattainable with current extractive agriculture practices.
• Indicative Developments: Companies engaged in extractive agriculture face increasing scrutiny on their environmental impact. In April 2024, the New York Attorney General filed a notable case against JBS for misleading greenhouse gas emissions commitments.² 

2. Antitrust Risks & Lawsuits:

• The top six corporations control more than 62% of the market in extractive agriculture, making the sector highly monopolistic.³ 
• This significant level of influence enables these few entities to exert undue influence over markets, agricultural research, and policy development, increasing the likelihood of power abuse, price collusion, and anti-competitive practices.
• Indicative Developments: Congress and the USDA have already begun taking steps to address corporate consolidation in the food industry.⁴

3. Legal & Reputational Risks:

• Extractive agriculture is associated with disproportionate negative impacts on marginalized communities and the natural resources they depend on for life and livelihood.^5,6 
• The Bureau of Labor Statistics data marks the agricultural sector as one of the most dangerous.⁶ The COVID-19 Pandemic exposed safety vulnerabilities in the meat processing industry in particular, with 59,000 infections and 269 deaths.⁷ These hazards disproportionately impact already vulnerable groups, with 76% of U.S. farmworkers being immigrants.⁸
• Indicative Developments: Companies engaged in extractive agriculture face increased legislative and legal action; such as a September 2024 ruling in which a judge in Brazil ordered four slaughterhouses to pay for reforestation in the Amazon rainforest.⁹ 

Benefits to Ending Extractive Agriculture:

• Alignment with Climate Disclosure & Sustainability Goals:
  Ending investments in extractive agriculture provides a clear signal for companies to align with growing demands for climate transparency and corporate accountability on a wide range of subjects, such as net-zero, food security, human rights, toxicity and pollution, human and animal diseases, and deforestation. Increasing transparency and eliminating opaque “externalities” benefits shareholders and communities alike.

• Supports a Just Transition:
  Ceasing investment in extractive agriculture and supporting holistic agricultural practices aligns with a Just Transition — an emerging agenda for investors that prioritizes fairness for workers and communities in the shift to an inclusive low-carbon economy. With over US$4.4 trillion in assets under management committed to taking action as of 2018, a Just Transition mitigates investor risks related to social inequality and labor disruptions by fostering long-term, sustainable value creation.¹⁰ 

• Improves Biodiversity
  Ending extractive agriculture contributes to improved global biodiversity in multiple ways, including by discontinuing deforestation activities; reducing reliance on industrial monocropping, synthetic pesticides, and fertilizers; and minimizing irrigation through drought-resistant crops. These and other shifts benefit both environmental and human health, support resilient food systems, and promote more stable local and global economies. 

• Improved corporate/shareholder value
  Ending extractive agriculture and adopting agroecological and sustainable food system practices significantly reduces risks associated with potential lawsuits, regulatory actions, and public disfavor, along with corresponding reputational damage that could severely impact profitability and introduce other significant unpriced business and market risks. Minimizing or retiring regulatory, legal, and reputational risks promotes improved long-term operational stability and market value.

Meaningful Investor Action:
These initial actions were developed in collaboration with Friends of the Earth. Stay tuned for additional recommendations as our work progresses. Investors are encouraged to take decisive action on any or all of the calls to action here:

• Inform & Mobilize:
  Read the Extractive Agriculture Issue Brief to familiarize yourself with the far-reaching impacts of extractive agriculture and share the document with your networks of social justice investors and advocates. Encourage others to take action by:
  Signing this Extractive
  Agriculture Investor Statement
  Joining the Extractive
  Agriculture Coalition

• Exclude:
  Identify companies to exclude from your investment portfolio, using the Extractive Agriculture Investor Dataset developed in partnership with ETC Group.

• Engage:
  Using the investor and business case set out in this Extractive Agriculture Investor Statement, insist that corporations engaging in extractive agricultural practices address the associated concerns, including:

• • Greenhouse gas emissions, by adopting disaggregated scope 1-3 disclosure and scientifically verified, Paris Agreement-aligned reduction targets.
  • Deforestation and biodiversity loss, by discontinuing deforestation activities, including in supply chains; reducing reliance on industrial monocropping, synthetic pesticides, and fertilizers; and minimizing irrigation through drought-resistant crops, soil health improvement, rainwater harvesting, and agroecological practices, particularly in water-stressed areas.
  • Indigenous peoples’ and local communities’ rights, by implementing the best standards of Free, Prior, and Informed Consent as a means to reduce human rights abuses, toxicity from pesticides and fertilizers, and displacements of communities.

Summary:
Extractive agriculture significantly contributes to climate change, inhibits biodiversity, and perpetuates racial and gender inequities. In turn, these practices pose material risks to investors. Conversely, ending extractive agriculture opens significant opportunities to advance climate justice and achieve sustainability goals that benefit investors.

The evidence is clear: it is in investors’ interest to act now to reduce their exposure to undisclosed harms and unpriced costs associated with this sector. Both impact-driven and returns-focused investors have the prerogative and means to invest in and engage companies on more sustainable agricultural practices, ensure a Just Transition, and build a safer, healthier, and more prosperous future for all.