Climate change and food
Human emissions of greenhouse gases (GHGs) have led 2016 to be the 3rd consecutive hottest year since recordkeeping began. At this rate, by 2100, Earth may experience global mean temperature increases of 3.7o C– 7.8o C compared to pre-industrial levels1.
Climate change threatens food security around the world through increase in the frequency and intensity of some disasters such as droughts, floods and storms, ground water depletion, spread of pests and ocean acidification.2 Climatic changes over the last 30 years have already reduced global agricultural production between 1–5%, per the First Assessment Report of the Intergovernmental Panel on Climate Change.
This trend can be particularly disruptive to global food security given how complex food supply chains are today. For instance, if soybean grown in Brazil is shipped to China to feed livestock, and the meat is then distributed throughout Chinese cities, a drought in Brazil could affect the food supply halfway around the world.3
Besides food security, climate change also adversely impacts profits of the food industry. For example, in 2010, Fresh Del Monte Produce Inc. faced a $9M loss due to heavy rains and flooding in Guatemala, which affected banana production. In the same year, severe droughts in Russia led the country to ban wheat exports, which created a disastrous ripple across global stock markets and prompted a 2.2 percent drop in the share price of General Mills.4
Impact of climate change on Cargill
Cargill is the largest privately-owned company in the US5 with a focus on providing food, beverage, and agricultural products to the world.
Figure 1: The following infographic visualizes Cargill’s work along global supply chains
Cargill faced a 200,000T shortfall in supply in September 2016 due to dry weather conditions in West Africa. Such instances will only increase in frequency and intensity going forward as higher temperatures, variable precipitation, and water constraints lower crop yields. As noted in a ‘Risky Business’ report, crop yields may decrease in the US by up to 20% within the next 25 years and some individual states may see their yields decrease by up to 70%.6
Cargill’s efforts to address climate change
While Cargill is impacted by climate change, it also contributes to climate change through deforestation, change in land use and energy use for agricultural purposes, all of which lead to a sizeable GHG emission. In fact, the food industry accounts for 25-27% of GHG emissions globally.7
Cargill has a two-pronged approach to tackling these problems. Their focus is on “reducing their impact while helping farmers adapt to a changing climate”.8
- Reducing environmental impact of its operations8: Cargill’s goal is to reduce its GHG intensity by 5% against a FY2015 baseline and they have they achieved a 2.2% reduction in FY2016. Similarly, they have achieved a 1.5% improvement in energy efficiency against a goal of 5% and of 14% in the use of renewables to meet energy needs against a goal of 18%.
- Partnering with farmers8: Cargill partners with farmers to help them adapt against changing climates and pushing for more investment in the areas of biosciences, agronomics and best practices in sustainable agriculture. For example, the Cargill Cocoa Promise has so far supported more than 145,000 farmers worldwide with market access, training and resources, while working with almost 500 farmer organizations and cooperatives.9
Opportunities for Cargill to do more
Cargill has the potential to do more to adapt to climate change. Firstly, it can reevaluate its entire supply chain to reduce waste. For instance, in processing fresh red meat, there can be losses of more than 10% within supply chains. Given that 600 gallons of water are required to produce one pound of beef, those resource losses add up quickly10. Cargill needs to start focusing on that waste.
Additionally, Cargill should identify and invest in technological solutions that promote sustainable farming.11 For instance, technology like multispectral analysis lets a farmer see which crops are doing well by looking at how the plants absorb or reflect different wavelengths of sunlight. If Cargill invests in companies like CropX that use sensors to detect moisture in the soil, farmers can become more sustainable by customizing water applications to the soil.12
On Nov 4, 2017, the United Nations issued a statement – “The last time carbon dioxide concentrations in the atmosphere were this high was three to five million years ago. We are still emitting far too much and this needs to be reversed. What we need now is global political will and a new sense of urgency.” 13 With US’s recent exit from the Paris Climate Agreement, the looming question is – in the absence of political will in US – the second largest GHG emitter14, will US companies be able to go through with their commitments to address climatic change?
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1 Rebecca A. Henderson et al., “Climate Change in 2017: Implications for Business,” HBS No. N2-317-032 (Boston: Harvard Business School Publishing, 2017), pg. 2.
2 Emily Logan, “5 Ways Climate Change is Challenging our Food Security”, 60+ Earth Hour, 16 Oct 2015, https://www.earthhour.org/content/5-ways-climate-change-challenging-our-food-security, accessed 15th November 2017
3 Sealed Air staff, “Climate change having a domino effect on the Food & Beverage industry”, Sealed Air Re-imagine, https://sealedair.com/insights/climate-change-domino-effect-food-beverage-industry, accessed 15th November 2017
4 Rebecca Pearl-Martinez and Tim Gore, “Feeding Climate Change”, Oxfam Briefing Paper, June 2016, https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-feeding-climate-change-270616-en.pdf, accessed 15th November 2017
5 Sarantis Michalopoulos, “Food industry focuses on sustainable sourcing to mitigate climate change”, EurActiv.com, November 20, 2015, http://www.euractiv.com/section/food-chain-sustainability/news/food-industry-focuses-on-sustainable-sourcing-to-mitigate-climate-change/, accessed November 2016.
6 Michael R. Bloomberg et al., “The Economic Risks of Climate Change in the United States,” The Risky Business Project, June 2014, https://riskybusiness.org/report/national/, accessed 15th November 2017
7 Rebecca Pearl-Martinez and Tim Gore, “Feeding Climate Change”, Oxfam Briefing Paper, June 2016, https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-feeding-climate-change-270616-en.pdf, accessed 15th November 2017
8 Cargill, “Climate Change”, https://www.cargill.com/sustainability/priorities/climate-change, accessed 15th November 2017
9 Cargill, “Cargill sets clear course for cocoa sustainability”, https://www.cargill.com/2017/cargill-sets-clear-course-for-cocoa-sustainability, accessed 15th November 2017
10 Sealed Air staff, “Climate change having a domino effect on the Food & Beverage industry”, Sealed Air Re-imagine, https://sealedair.com/insights/climate-change-domino-effect-food-beverage-industry, accessed 15th November 2017
11 IPCC, 2014: Summary for Policymakers. In: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1-32.
12 Jennifer Kite-Powell, “Take A Look At How Technology Makes Smart And Sustainable Farming”, Forbes, Dec 31 2016, https://www.forbes.com/sites/jenniferhicks/2016/12/31/take-a-look-at-how-technology-makes-smart-and-sustainble-farming/#1ac6f9f03deb, accessed 15th November 2017
13 Daniel Arkin, “Alarming Rise in CO2 Levels Looms Over Global Climate Change Summit”, NBC News, November 4 2017, https://www.nbcnews.com/news/world/scientists-sound-alarm-global-warming-ahead-world-climate-conference-n817046, accessed 15th November 2017
14 Duncan Clark, “Which nations are most responsible for climate change?”, The Guardian, 21 April 2011, https://www.theguardian.com/environment/2011/apr/21/countries-responsible-climate-change, accessed 15th November 2017