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.
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.