Food, Beverage Execs to GOP: Climate Change Is Hurting Our Supply Chains


by | May 31, 2016

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wheatClimate-change related weather events have disrupted Kellogg’s supply chain in recent years.

As an example, rice — a key ingredient in Kellogg’s Rice Krispies — sourced for food production in Europe, from Egypt, took a huge hit from severe droughts in 2008 before Egypt eventually closed its boarders to export. Kellogg had to find a new region from which to source rice.

Climate change poses “inherent risk to the food supply system,” Kellogg chief sustainability officer Diane Holdorf told Environmental Leader in an interview. Last week, Holdorf and other food and beverage industry execs took this message to Capitol Hill, meeting with US House lawmakers and urging federal action on climate change.

Just days after the food companies’ congressional briefing, Republican presidential nominee Donald Trump gave his first major speech on energy policy, saying he would “cancel” the Paris climate agreement because it is “bad for US business” and ditch the Clean Power Plan.

Some businesses, at least, think otherwise.

“Climate change can impact both food security and our business by posing risks to the long-term health and viability of the ingredients we use in our foods,” Holdorf says. This also represents a financial burden to the company although Holdorf says she doesn’t have a figure for exact costs associated with climate risk.

At a congressional briefing, executives from Ben & Jerry’s, Clif Bar, Kellogg Company, Mars Incorporated, PepsiCo, Stonyfield and Unilever discussed how climate change is disrupting global food supplies and their own supply chains.

Sustainability nonprofit group Ceres organized the briefing, which was led by climate action supporters, Sen. Sheldon Whitehouse (D-R.I.) and Rep. Chris Gibson (R-N.Y.) Last September, Gibson with 10 of his republican colleagues in the House introduced a climate change resolution. While it’s unlikely to pass, it’s significant in that it shows at least some Republican support for climate policies.

Anne Kelly, senior director of policy and BICEP program at Ceres, says engaging Republican lawmakers in the House is key to advancing climate policy, which is why the food and beverage industry execs were on Capitol Hill last week. “The seven companies conveyed their sense of climate risk in a business savvy way,” Kelly told Environmental Leader. “They discussed the risks they see in terms of commodities and shortages and prices. The congressmen understood this is a business case they are making and it needs congressional action.

“The food companies got very specific about the crops they need that are now threatened, from vanilla to sugar to rice to corn,” Kelly continued. “Extreme weather events are now threatening their availability. These companies are seeing on-the-ground changes in their supply chains that affect the predictability of their businesses.”

Making an economic case for climate policy will be key to securing the GOP-controlled House’s support, Kelly says, and Rep. Gibson had suggestions on how to win over more Republicans. “He made suggestions about linking this problem to individual districts, to employment, providing specific solutions and doing more direct outreach to members.”

Since 2009, Ceres’ has been working with food and beverage companies and other consumer brands through its advocacy coalition, Business for Innovative Climate and Energy Policy, BICEP, to push lawmakers to pass climate and clean energy legislation.

Two years ago BICEP organized 223 companies to sign a letter in support of the Clean Power Plan because “the new standards will reinforce what leading companies already know: climate change poses real financial risks and substantial economic opportunities and we must act now.” Last fall many of these same food and beverage executives urged US and world leaders to back climate action and the Paris climate agreement. And last month Mars, a BICEP company, led an amicus brief supporting the Clean Power Plan.

At the congressional briefing last week the food and beverage executives shared their best business practices for dealing with climate change and other sustainability threats. They also updated congressional leaders on their climate and clean energy commitments post-Paris.

Kellogg, for example, has committed a 65 percent reduction for direct greenhouse emissions by 2050 from its 2015 baseline, and to engage suppliers to reduce indirect emissions by 50 percent by 2050 from the 2015 baseline, which represent a continuation from its 2020 sustainability commitments.

Unilever said 100 percent of its energy will come from renewable sources, and it will directly support the generation of more renewable energy than it needs for its own operations, making the surplus available to the markets and communities in which they operate.

Kellogg incorporates climate change management into its overall risk and cost mitigation strategies, Holdorf says. “We’ve learned to incorporate this into how we plan our business.

Companies need lawmakers’ support to transition to a low-carbon economy, Holdorf says. “Climate change is one of the biggest challenges we have ahead of us. It’s going to take all parties working together to really accomplish the transformation and reduce the business risks associated with climate change. We want to demonstrate we as business leaders are playing our part and encouraging others in our industries to do the same. We’re looking for Congress’ support to help drive that transformation as well.”

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