Climate Change

Issue Overview

Although climate change is likely to affect agriculture differently from region to region, there is scientific consensus that global climate change will have major, generally negative impacts on food systems. Erratic weather, the effects of temperature shifts and sea level rise all pose threats the current agricultural system.

Climate change creates more erratic weather patterns, resulting in more instances of prolonged drought as well as severe flooding which can degrade and inundate farms and livestock operations.  

  • Variations in seasonal temperatures and changing rainfall patterns increase crop stress and reduce livestock yield.
  • Warmer temperatures impact the timing of snow melt, which is a major contributor to water supply for growing regions.
  • Crop and animal loss from disease, pests, and weeds, intensify as temperatures rise.
  • In some coastal regions of the world, the rise in sea levels reduces usable cropland.

At the same time, the conversion of natural habitats and practices used in agricultural and livestock operations contribute to climate change. Direct contributions from food production include:

  • Greenhouse gas emissions (GHG) generated during livestock production and manure management
  • Production of nitrous oxide from synthetic fertilizer use (to grow crops and livestock feed)
  • Methane produced during the cultivation of rice in flooded conditions
  • Fossil fuel emissions from powering machinery and irrigation pumps.

Agricultural producers can play an active role in mitigating greenhouse gas emissions through shifts in their management choices. Common examples include improving the management of soils, optimizing use of fuel/ fertilizer inputs, and reducing methane emissions from livestock production. Proactive strategies to address GHG emissions within food production make good business sense. These strategies enable companies to identify opportunities to bolster their bottom line and improve planning for potential future climate change regulations. Agriculture’s environmental and social challenges are all interrelated, and understanding them requires a system-wide view. Climate change, for example, affects water availability, but land management practices affect water quality and contribute to climate change.

Business Risks from Climate Change

Operational

Beginning in 2012, GlaxoSmithKline found that more extreme and variable weather caused by climate change was having a major impact on British blackcurrant harvests.

IMPACTS

  • Reduced agricultural productivity

Operational

Campbell’s Soup Company has struggled with extreme weather in California, a key growing region for its carrot supplies. In 2014, California's record-setting drought followed by intense rains led to a 28% decline in profits for its carrot division.

IMPACTS

  • R&D spending for more resilient varieties

Litigation

In late 2015, a Peruvian farmer filed suit against RWE, a large European energy company, for its alleged contributions to global warming based on its total emissions over two centuries. The complaint claims that global warming is causing glaciers near the farmer's home to melt, which in turn is causing lakes in the area to flood and threaten his property.

IMPACTS

  • Legal fees and monetary settlements for violating laws and regulations

Priority Commodities

Among the most commonly sourced commodities profiled in Engage the Chain, climate change impacts are most significant in the production of beef and dairy. Of note, deforestation and land use change related to the production of beef, palm oil, and soybean also contributes to global climate change. This is addressed in the section on “deforestation and land use change.” 

The following summarizes how the production of beef and dairy contribute worldwide to climate change. It is important to consider that the scale of the impacts depends on the practices used by individual livestock operations and feed growers, as well as regional and local conditions.

Beef

Beef production has a significant impact on climate change, accounting for 5.9 percent of total manmade greenhouse gas emissions.

  • Cattle contribute directly to greenhouse gas emissions when they digest their feed and produce manure. Fertilizers and energy used for growing the animal’s feed also contribute to total greenhouse gas emissions.
  • More than half of the global emissions from the livestock sector are related to beef and cattle milk (beef accounts for 41 percent; dairy cows for 20 percent).

Dairy

Dairy production has a significant impact on climate change.

  • Dairy cows release greenhouse gases when they digest their feed (enteric fermentation).
  • Dairy operations contribute greenhouse gases during manure management (anaerobic decomposition of organic matter in manure). 
  • Fertilizers and energy used to grow feed also contribute to greenhouse gas emissions.

More than half of the global emissions from the livestock sector are related to beef and cattle milk (dairy cows account for 20 percent; beef for 41 percent). Globally, cattle milk produces 1.42 gigatonnes of CO2 eq per annum, representing 2.9 percent of human-induced GHG emissions.

When calculating a “greenhouse gas footprint” for beef or dairy in any particular operation, it is important to take into account how the animals are raised as changes in their type of feed and other management practices affect the amount and type of greenhouse gas emissions. 

Priorities for Investor Engagement

Ceres Investor Network on Climate Risk and Sustainability: The Ceres Investor Network on Climate Risk and Sustainability comprises more than 130 institutional investors, collectively managing more than $17 trillion in assets, advancing leading investment practices, corporate engagement strategies and policy solutions to build an equitable, sustainable global economy and planet.