Food companies are not only at risk due to water scarcity, they are also responsible for it. Agriculture is rapidly draining aquifers in many regions of the world, and meat production is one of the biggest polluters of watersheds globally.
This report provides investors with guidance and relevant data for evaluating the water risk management of 40 major companies in the agricultural products, beverage, meat, and packaged food industries. It also tracks their progress in managing their water risks as compared to performance in 2017 and 2015. This analysis can help food companies manage their water risks more effectively, which is critically important to their bottom lines. Key findings include:
- Of the 35 publicly traded companies evaluated, 77 percent specifically mention water as a risk factor in their financial filings, up from 59 percent in 2017.
- Despite this growing awareness, effective management of water risk still lags, with an average overall company score of 38 out of 100. Meat companies, which are particularly vulnerable to water risks, also continue to do the least to manage them.
- Food companies can make their supply chains more resilient by supporting sustainable farming practices in the watersheds where their most significant commodity inputs are sourced. Yet 37 percent still lack goals to source crops in ways that reduce impacts on water use and quality. Additionally, existing goals often lack clear definitions, implementation plans, and measurements of progress.
- By supporting farmers’ transitions to more sustainable methods of production, companies can fortify their supply chains against the extremes in weather that are increasingly frequent due to climate change. Yet less than half of companies evaluated provide any form of financial support to growers to encourage adoption of more resilient agricultural practices such as efficient irrigation, low-till/no-till, cover-cropping, optimised fertiliser application, or diverse rotations.