Back in March, popular burrito chain Chipotle made news when ThinkProgress reported that climate change could threaten its guacamole supply. That report was based on a statement Chipotle made in its annual report to its investors, filed with the Securities Exchange Commission.
Chipotle took issue with the story, noting that its language about how climate change could affect guacamole was routine for annual reports and other SEC filings. The SEC requires companies to tell investors about any business risk they face, no matter how small. Indeed, companies mention things like freak accidents and terrorist attacks in these reports as well. In all, Chipotle just didn’t want its customers to become alarmed about a guacamole shortage (and in fact, guacamole hasn’t budged from the menu).
But as ThinkProgress noted at the time, the real story was not a guacamole shortage, but the emerging reality of doing business in a warming world. While politicians continue to bicker over whether or not climate change exists, companies now have no choice in the matter — they must acknowledge the science and the risk and disclose the reality of that risk to their investors’ pocketbooks. Whether that risk actually manifests itself is another matter, but the fact that companies are increasingly putting climate change on their threat lists speaks volumes to the severity of the problem.
Here are seven other big food companies that disclose to investors that climate change poses a threat to their products and bottom lines.
Keurig Green Mountain
CREDIT: AP Photo/Toby Talbot
The company famous for making it so humans have to put basically no effort into making coffee disclosed in its most recent quarterly report to investors that climate change could impact coffee and tea crops. In a clip from the report’s climate risk section, headlined “Climate change may have a long-term adverse impact on our business and results of operations,” Keurig noted increasing concern among scientists that climate change could change weather patterns across the globe.
“Decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit availability or increase the cost of key agricultural commodities, such as coffee and tea, which are important sources of ingredients for our products, and could impact the food security of communities around the world,” the report said. “Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products.”
It’s long been known that both coffee and tea crops are threatened by climate change. Severe drought has negatively impacted Brazil’s coffee bean crop, and pest invasions have affected Sri Lanka’s tea.
Michael Foods Group
You probably know Michael Foods Group’s products even if you don’t know their parent company’s name. The $2 billion company produces the AllWhites egg whites, Better’n Eggs, and Simply Potatoes brands. It also says climate change and some of the known effects of climate change pose a risk to its business.
“There is increasing concern that a gradual increase in global average temperatures due to increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe,” the company said in a recent 10-K filing. “Increased frequency or duration of extreme weather conditions could also impair production capability and disrupt suppliers or impact demand for our products.”
Along with extreme weather, the company cites the spread of avian influenza and pests as things that could have a negative impact on business. Peer-reviewed research from the University of Michigan states that climate change could increase the risk of avian influenza near the Delaware Bay.
“To protect against this risk, we have intensified biosecurity measures at our layer locations,” the company said. “Nevertheless, weather, disease and pests could affect a substantial portion of our production facilities in any year and could have a material adverse effect on our business, prospects, results of operations and financial condition.”
CREDIT: AP Photo/Toby Talbot
It makes sense that Heinz’s disclosure to investors about climate change would be a bit wishy-washy; the company is, after all, owned by Warren Buffett, whose personal views on climate change have been similarly lacking in strength. But a risk disclosure in one the company’s latest SEC filings does list the “potential impact of climate change” along with crop shortages, pest infestations, and “other unforeseen circumstances” as things that could harm business.
“The company sources raw materials including agricultural commodities such as tomatoes, cucumbers, potatoes, onions, other fruits and vegetables, dairy products, meat, sugar and other sweeteners, including high fructose corn syrup, spices, and flour, as well as packaging materials such as glass, plastic, metal, paper, fiberboard, and other materials and inputs such as water, in order to manufacture products,” the filing reads. “The availability or cost of such commodities may fluctuate widely due to government policy and regulation, crop failures or shortages due to plant disease or insect and other pest infestation, weather conditions, potential impact of climate change, increased demand for biofuels, or other unforeseen circumstances.”
Big Heart Pet Brands
If you can’t get worried about climate change for humans, then at least think about the puppies and kittens. Big Heart Pet Brands is another one of those parent company names you might not know, but you probably know their brands: Milk-Bone, Meow Mix, Kibbles ‘n Bits, and 9 Lives to name a few. And in that company’s most recent 10-K, it acknowledged that adverse weather events “caused by climate change or otherwise” could drive up the price of its ingredients.
“The commodities and ingredients that we use in the production of our products (including grain and soybean meal) are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes and pestilences,” the filing reads. “Adverse weather conditions may be impacted by climate change and other factors. Adverse weather conditions and natural disasters can reduce crop size and crop quality, which in turn could reduce our supplies of ingredients, or increase the prices of our ingredients.”
But unlike other companies, Big Heart actually has a section stating that they are working to combat climate change by working on “a variety of sustainability activities.” That’s in its own interest, as it notes its own customers want them to do it. “Sustainability is also an area of interest for certain of our customers and consumers and, particularly in light of concerns regarding climate change, may become an area of increased focus,” the filing says.
The Omega Protein Corporation, which produces omega-3 fish oil, is probably not one you’ve ever heard of, but it bills itself as the country’s largest manufacturer of organic fish solubles. While that might not be part of your daily diet, the unique nature of their product means that climate change could impact the company’s business in a unique way.
A lot of Omega’s fish oil products come from the menhaden fish, which Wikipedia notes is also known as the mossbunker, bunker, or pogy fish. Unrelated to the company, these fish are also important prey species for larger fish in the Chesapeake Bay.
Omega’s filing says that the effects of climate change could negatively impact the menhaden species, which would pose great risk to the company. “It is possible that these conditions, if they occur, would impact the spawning, feeding, migration, distribution and growth of the menhaden species and hence, our fishing harvest,” the filing reads. “As a result, such conditions may pose increased climate-related risks to our assets and operations.”
CREDIT: AP Photo/Jeff Chiu
Coca-Cola’s risk statement about climate change is pretty basic, but it’s simple enough to encapsulate the basic big picture: that the affects of climate change as scientists see them could be bad for profits.
“The growing political and scientific sentiment is that increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere are influencing global weather patterns,” a company 10-K filing says. “Changing weather patterns, along with the increased frequency or duration of extreme weather conditions, could impact the availability or increase the cost of key raw materials that the Company uses to produce its products. In addition, the sale of these products can be impacted by weather conditions.”
In addition, the company also acknowledges that regulations to curb greenhouse gas emissions imposed by the U.S. Environmental Protection Agency could also negatively impact business. Current regulations have had a “minor” affect on business now, but the filing said that future regulations could “directly or indirectly affect the Company’s production, distribution, packaging, cost of raw materials, fuel, ingredients and water.”
Marine Harvest ASA
While Marine Harvest (formerly known as Pan Fish) is also not a household name, the $3 billion Norwegian seafood company has a share of almost 30 percent of the global salmon and trout market, according to a company Board of Director’s report. In 2006, Marine Harvest was the world’s largest producer of Atlantic salmon, with 9000 employees in 20 countries on five continents.
In an April filing with the SEC, the company cited rising ocean temperatures and ocean acidification as the “two main threats” faced by the company due to climate change
“Climate change poses a potential challenge to our industry,” the filing reads. “Fish farming is dependent on thriving aquatic ecosystems which are particularly vulnerable to the effects of a warming planet.”
Because of this, the filing goes on to say that the company must help solve the problem by reducing its own greenhouse gas emissions, even going to far as saying it would explore a “more climate friendly protein alternative” for the business. In addition, the company said it would reduce the animal content of its fish feed — a change that would be “key to both profitability and improving our carbon footprint.”