Can dairy thrive in the age of methane transparency?

It’s here, or it’s coming. The EU Corporate Sustainability Reporting Directive (CSRD) is being rolled out and will require large companies to disclose their climate impact in greater detail than ever before.

Corporate sustainability reports already cover direct, indirect and value‑chain emissions as part of broader ESG targets – but few companies disclose their full GHG footprint in a disaggregated way.

The latter isn’t only down to reluctance but also to reporting challenges. For example, methane – which accounts for a large share of dairy and meat companies’ overall emissions – is notoriously difficult to track. But industry players such as Danone and Nestlé have shown it can be done – and tightening regulation is expected to further accelerate the shift toward transparency.

The CSRD will standardise disclosures, making it easier for both industry peers and investors to scrutinise and benchmark against comparable data. The regulation applies a ‘double materiality’ test, requiring companies to assess emissions in terms of both their environmental impact and financial risk to the business – making methane disclosure effectively unavoidable.

The softening of the Corporate Sustainability Due Diligence Directive (CSDDD) also does little to ease the pressure on heavy methane-emitting sectors. While climate provisions such as mandatory transition plans have been scrapped, large meat and dairy companies remain in scope: and are still required to address environmental harms in their value chains.

And it’s not just the EU. International standards such as the GHG Protocol – which has become a benchmark for corporate GHG reporting – require methane to be accounted for in scope 1 and 2 emissions, meaning that methane disclosure becomes a necessity in broader corporate reporting, even if companies don’t trade in the bloc.

Methane transparency in dairy: leaders, laggards and gaps

So how is the industry faring when it comes to methane disclosure and action?

In 2026, only a handful of companies report emissions and/or have action plans.

According to a recent report by NGO Changing Markets, only three companies – Danone, General Mills, and Bel Group – have methane action plans in place.

Others are engaging – whether through public disclosure (Nestlé), broader climate targets (FrieslandCampina) or limited measures (Arla) – but do not yet have a specific methane plan in place.

And a third category – featuring the likes of Lactalis, Müller and Dairy Farmers of America – are not engaging meaningfully with methane: with neither disclosure of emissions nor a clear action plan in place.

“We expect that with greater transparency there will be more pressure from investors and policymakers for these companies to put in place mitigation plans,” said Nusa Urbancic, CEO at Changing Markets.

But whether disclosures would lead to reductions remains the bigger question.

“So far, only three companies have reported methane reductions for 2024 and 2025: Danone, Le Groupe Bel and Nestlé,” she added. “For the other companies, we do not have information, either because they are not reporting their methane emissions in a disaggregated way or because they have not yet achieved any reductions.”

Regulation may be a blunt instrument when it comes to forcing action. The CSRD only mandates that companies must report emissions and risk – but it doesn’t require businesses to reduce emissions. The CSDDD introduces obligations to prevent or mitigate environmental harm – but doesn’t force mandatory climate action.

So where does that leave dairy?

The sector remains under compliance pressure, but the immediate danger to competitiveness is less severe since companies won’t be formally required to cut emissions, or meet formal, bloc-wide targets to that end.

That doesn’t mean the pressure is off – because the market may force change even if regulation remains weak.

Sustainability is becoming a baseline requirement for investors. Nestlé recently lost a major backer (in UK pension management company Railpen) over its management of material ESG issues – including limited transparency around climate transition planning, alongside governance stability and strategy concerns.

And increasingly, investment firms are making methane part of their expectations.

“Our earlier research with Planet Tracker, showed that Norges Bank Investment Management (NBIM), has a methane-specific policy, which covers agriculture and is requiring the companies it invests in to align their targets with the Global Methane Pledge,” Changing Markets’ Urbancic said. “NBIM invests in some of the biggest companies in the sector, like Nestlé and Tesco. In addition, two investors, JP Morgan and State Street, have methane specific policies that cover fossil fuels.

“We might see more investors expecting food companies to address their methane risks – especially as climate issues become more visible through improved CSRD reporting and disclosures.”

Methane mitigation also represents a significant opportunity for the sector, she added.

“Rapidly cutting methane emissions is widely deemed as a climate emergency brake, because it has the highest impact on slowing warming. If we do not act on methane, this will not only worsen the climate crisis but also impact crop productivity and human health.”