Climate-related water shortages causing food companies to lose millions

Climate change is making extreme rain and extreme drought more common. Across the world, farmers are increasingly struggling with water shortages, but they’re also dealing with risk from outdated water management protocols and infrastructure that isn’t equipped to deal with the kind of water events we’re seeing from climate change.

All that is already known. But what’s recently been analysed is how large corporations, especially those in the food industry, are responding.

“Food companies are in the bull’s eye of climate change, and hotter temperatures are making water one of the biggest risks to the $5 trillion industry’s bottom line,” reveals an analysis of just how at-risk food companies’ are to water shortages.

Financial risk from climate change is past theoretical. In 2016 Fresh Del Monte lost $2.5 million in a drought in Brazil and Hurricane Matthew flooded manure lagoons, killing over two million livestock animals. A year later saw Coca-Cola and PepsiCo each lose over a million retailers in a drought in India that left their bottling plant competing with locals for groundwater. 

Hard numbers place food companies’ global revenue risk from lack of water at $459 billion, and $198 billion more at risk from shifting precipitation patterns directly affecting crop production.

Far from being strictly a concern for local governments and scientists, these increasing water shortages are now firmly a concern and consideration for investors. In fact, about 85% of the 42 companies profiled singled out water shortages as a major risk in their financial filings.

Indoor Vertical Farming Investors Can Rest Easy

More and more, investors want food companies to address water-related risk and commit to the United Nations Sustainable Development Goals — two things Urban Health Farms and vertically farmed produce do naturally.

Indoor vertical farming uses 80% less water, 90% less land and produces zero agricultural runoff, effectively minimising concerns over how to increase production yields while protecting our freshwater resources.

Many food companies don’t have the kind of control over their supply chain that Urban Health Farms does. We don’t need to partner with individual growers to ensure we’re using less water. We already do that, protecting both our food future and your investment from climate-related water shortages.