Archer Daniels Midland, Monster Beverage, Tyson Foods, Kraft Heinz and other major food and beverage companies that are “poor performers on water management issues,” must increase their water risk management and disclosure practices, according to investors.
More than 60 leading North American and European institutional investors collectively managing $2.6 trillion in assets sent joint letters to 15 food and beverage companies last week.
“We…believe that global water risk management is a critical aspect of financial risk oversight in the food and beverage sector,” say the letters, which were coordinated by the nonprofit sustainability organization Ceres, with support from the Interfaith Center on Corporate Responsibility and the United Nations-supported Principles for Responsible Investment. “These threats can, and already are having profound near-term business impacts on food and beverage companies that are disrupting operations and supply chains, increasing capital expenditures and operating costs, and constraining revenue growth.”
The 15 companies receiving letters were selected based on their relatively low water management risk scores in a recent Ceres’ report, Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks. Of the 31 publicly traded U.S. companies evaluated by Ceres’ report, 90 percent cite water as a material risk in their 10-K filings, yet only 30 percent indicated that water risks were part of major business planning activities and investment decision-making.
Participating investors have asked the 15 companies to disclose additional water risk information to the CDP Water Questionnaire in the coming year and will be following up with company management in the coming weeks and months.