Can Tyson curb the impact of Climate Change?
The food industry is being greatly impacted by climate change. Will Tyson be able to adapt? Is that enough to ensure its survival?
The food industry in general, is one which has a very high dependency on natural resources. It needs fertile and arable soil, easy access to clean water, clean air and energy among other resources. This dependency makes the Industry highly vulnerable to climate change.
Let’s talk about Tyson Foods, a multinational American food-industry corporation. According to its own Fact Book it recorded $40.6 Billion in annual sales in 2015 and has approximately 20% of the USA’s beef, chicken and pork market share.1
Water for example; according to a report recently published by Mckinsey & Co about climate change “In 2012, for example, Cargill, one of the world’s largest food and agricultural companies, posted its worst quarterly earnings in two decades, in large part because of the US drought. While no single event can be attributed to climate change, of course, this is an example of how climate can and does affect business prospects.”2
It’s these kinds of losses that Tyson is trying to avoid by better managing its environmental footprint. Continuing the water example aforementioned, Tyson is focusing some of its own efforts in the protection and conservation of clean water. As of 2012, it operated 34 full treatment and 43 pretreatment wastewater plants in North America. These efforts have resulted in a 10.9% reduction of water consumption which also translates into a 21% reduction in the gallons per weight of finished product.3
In addition to water protection and conservation, Tyson Foods has implemented significant changes to its operations to manage greenhouse gas emissions. It describes these on its 2012 sustainability report the following way “Our air emissions management approach also includes the implementation of pollution prevention programs, the installation of pollution control equipment, and investment in air emission control technologies, as needed. We have completed a potential-to-emit inventory for our U.S.-based operations as a component of the ongoing process of managing air permits and operational changes” 3
Other large corporations such as Walmart, Nike, Starbucks, Johnson & Johnson and Procter & Gamble have already committed to switch to 100% renewable energy on individual timelines.4 Business in general has realized that the economic damage from climate change will be large. A report recently published by Citigroup states that a 2.5 degree Celsius increase in global average weather will negatively impact world GDP by $44 trillion.5
It’s not surprising that Tyson is beginning to take actions that tackle the issue of climate change. Being such a large player in an industry in which most of its crucial and fundamental operations are performed in nature where the effects of climate change are most evident, Tyson still has a long way in optimizing its operations to reduce its environmental footprint and the possible negative impact that climate change will have in the company’s future performance.
Some steps that Tyson could further take are related to waste management. Although it states in its 2012 sustainability report that it is “continually improving its waste management performance” some of the numbers it published contradict this: It generated 3.4% more landfill solid waste in 2011 than in 2010 while it only recycled 0.8% more of its old corrugated containers and plastic waste in the same period.3 Increasing its efforts to reuse and recycle its waste would help offset the increasing economic damages climate change creates.
Another important consideration Tyson should also make is the long term viability of the location of its farms. The key question is: Are my farms currently located in areas that have experienced or are expected to experience a drastic change in climate conditions? Some examples would be farms in California hit by drought, or in Florida hit by an increase in number of hurricanes.
Tyson has put in place and executed plans to reduce its risk to the consequences of climate change but additional actions will help reduce that risk even further. Truth be told, no matter how much Tyson or any other company adapts its operations to a harsher, less predictable climate, the solution lies in reducing the advancement of climate change.
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References
Tyson Foods, Inc. (2013). Fiscal 2013 Fact Book. Springdale, Arkansas: Tyson Foods, Inc.
Engel, H., Enkvist, P.-A., & Henderson, K. (2015). How companies can adapt to climate change. New York: Mckinsey & Co.
Tyson Foods, I. (2012). Sustainability report. Springdale: Tyson Foods, Inc.
Worland, J. (2015). Why Big Business Is Taking Climate Change Seriously. Time Magazine, 1.
What I find particularly interesting with giant food conglomerates like Tyson is the fact that the company itself contributes so much to environmental disruption. While the company may be making efforts to ensure that their raw materials are sourced in a sustainable way, it feels a bit disingenuous to me. The only reason Tyson probably cares about sustainability is because it must ensure that these raw materials will be available in the future for harvesting and cannot afford to let its raw materials deplete so rapidly such that there ends up being a sourcing shortage. In addition, Tyson’s own operations take such a big toll on the environment that perhaps the damage it does by even existing as a business makes any sustainable effort miniscule and almost pointless. For example, Tyson is the second biggest polluter of waterways in America, dumping more pollutants into the water than even ExxonMobil. Even in twenty years, I would be surprised if Tyson has made much progress in becoming a sustainable business.
Source: http://www.sustainablebrands.com/news_and_views/behavior_change/hannah_furlong/tyson_foods_dumps_more_pollution_waterways_each_year_e
“Global poultry production has more than quadrupled since 1970.” Tyson’s role against climate change becomes more imperative when one considers the fact that the chicken industry is actually still growing. This means that Tyson not only needs to manage its current effect on the environment, but also position itself to rein in its impact as it continues to grow. Unfortunately, Tyson seems to have a long way to go before it reaches respectable levels of sustainability, which seems pretty typical among food (and beverage) companies whose inputs are directly impacted by climate change.
http://www.nytimes.com/2016/02/07/opinion/sunday/what-you-get-when-you-mix-chickens-china-and-climate-change.html
Good read, thanks for sharing. I found it interesting to see the impact quantified (eg, 2.5 degree Celsius increase in global average weather will negatively impact world GDP by $44 trillion) as I would expect that number to be higher. Additionally, it was great to learn that Tyson is going as far as water treatment to make an impact.
I would be interested to see how these numbers are tracking since 2012. I imagine the solid waste trend has reversed, but I’d hope to see the recycling numbers increase. Additionally, I liked your point re: the location of farms. While it’s probably impossible to re-locate and assuming they are in the Midwest, I wonder how much natural disasters have played a part relative to general drought complications. Either way, they’ll still remain victims of a harsher, less predictable climate.