{"id":10159,"date":"2016-11-03T23:50:24","date_gmt":"2016-11-04T03:50:24","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/a-growing-issue-cargills-climate-change-push\/"},"modified":"2016-11-03T23:52:20","modified_gmt":"2016-11-04T03:52:20","slug":"a-growing-issue-cargills-climate-change-push","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-growing-issue-cargills-climate-change-push\/","title":{"rendered":"A Growing Issue: Cargill\u2019s Climate Change Push"},"content":{"rendered":"

\u201cSo here\u2019s the question for all of us in agriculture: are we in a situation where increasing levels of global CO2<\/sub> are loading the dice?\u201d \u2013 Greg Page, Executive Chairman, Cargill1<\/sup><\/p>\n

 <\/p><\/blockquote>\n

After spending four days on the road a week as a consultant, I was inspired to celebrate the lack of regular travel during business school by buying a live plant at the local market.<\/p>\n

\"Changing<\/a>
Changing water patterns and temperatures do not bode well for plants.<\/figcaption><\/figure>\n

A first-time live plant owner, I surprised myself by keeping the plant alive past the one month milestone.\u00a0 But then things changed. \u00a0I got busy. I forgot to water the plant. I inadvertently placed the plant next to our heating duct. You may have guessed how this story ends \u2013 I no longer have a live plant. \u00a0And while this story may seem trivial, Mother Nature is moving around heating ducts and changing her watering patterns as we speak, and perhaps no business is more exposed to those changes than Cargill.<\/p>\n

As the climate changes, so does Cargill\u2019s business.\u00a0 The largest private company in the United States, Cargill\u2019s influence spans across the food supply chain, including agricultural trading and processing, food ingredients and products, meat, poultry, and eggs, farmer services, and animal feed.2<\/sup> That is why changes in climate that affect crop yield and livestock conditions require serious and diligent strategic consideration from the Minnesota-based company.<\/p>\n

In the agricultural belt of America, there is likely to be quite a bit of change in temperature, precipitation, and consequently crop yield.\u00a0 Across middle America, which accounts for most the nation\u2019s crop yield, average summer temperatures are anticipated to rise by 10\u00b0F+ by the end of the century. Over the same duration, grain, oilseed and cotton yields are projected to decrease by more than 50% in parts of the Midwest.3<\/sup> This fundamental change in agricultural suitability is not localized to America.\u00a0 Cargill\u2019s 150,000 employees across 70 countries will all need to adapt as agricultural circumstances change across the globe.4<\/sup><\/p>\n

\"Crop<\/a>
Temperatures are expected to rise and crop yields are expected to drop in middle America. Rhodium Group. \u201cAmerican Climate Prospectus: Economic Risks in the United States.\u201d October 2014.<\/figcaption><\/figure>\n

To that end, Cargill is not waiting for Mother Nature.\u00a0 They\u2019ve seen enough of her hand to start placing bets to prepare them for the future.\u00a0 The bets have taken two primary forms to-date: capital investment to shift their geographic footprint and advocacy efforts to raise awareness and create a fact base about climate change.\u00a0 Cargill\u2019s largest single-site capital investment in 2015 was a canola processing plant in Camrose, Alberta, shifting their North American grain infrastructure north.5<\/sup> On the awareness front, they\u2019ve served in an advisory capacity for several organizations researching the impact of climate change on America, including The Risky Business Project, which was co-chaired by Michael Bloomberg, Henry Paulson, and Tom Steyer.6<\/sup><\/p>\n

But while Cargill has invested time and capital to be ready to adapt to climate change on the crop front, it\u2019s less clear what they are doing on to prevent climate change in their livestock business.\u00a0 Worldwide, livestock accounts for 14.5% of all annual greenhouse gas emissions. \u00a0In fact, it is a larger source of greenhouse gas emissions than natural gas, landfills, and coal.7<\/sup> As one of the world\u2019s largest animal feed and nutrition providers and one of North America\u2019s largest beef processors, Cargill is a key contributor to these emissions.<\/p>\n

\"Ruminants<\/a>
Ruminants are responsible for more greenhouse gas emissions than natural case and coal. Number of ruminants continue to grow.
Ripple et. al, \u201cRuminants, climate change and climate policy,\u201d Nature Climate Change. January 2014, vol 4.<\/figcaption><\/figure>\n

Changes to the beef business will require strong will.\u00a0 Beef demand is forecasted to almost double by 2050, driven by an increasing global population and more people coming out of poverty.8<\/sup> This will increase direct greenhouse emissions, as more cattle release more methane into the air.\u00a0 But it will also have second and third order effects, as more land will be needed to house livestock (which account for 70% of agricultural land today) and crops that could feed humans will be used to feed cattle.9<\/sup><\/p>\n

Cargill should consider taking the lead on livestock and climate change as it has in farming. \u00a0While this will require much bolder decisions, such as funding potentially disruptive research and pushing for policy changes related to livestock consumption, the diversified nature of their business (a market leader in agriculture and livestock) positions them well to capture a shift away meat consumption.<\/p>\n

\u00a0<\/strong><\/p>\n

————————<\/p>\n

 <\/p>\n

1<\/sup> Greg Page, \u201cClimate Change: Can we afford to play with loaded dice?\u201d speech given at Indiana Governor\u2019s Agriculture Conference, Indianapolis, Indiana, January 16, 2015.<\/p>\n

2<\/sup> Cargill. \u201cOur Businesses.\u201d http:\/\/www.cargill.com\/company\/businesses\/index.jsp<\/a>, accessed November 2016.<\/p>\n

3<\/sup> Rhodium Group. \u201cAmerican Climate Prospectus: Economic Risks in the United States.\u201d October 2014. http:\/\/climateprospectus.org\/assets\/publications\/AmericanClimateProspectus_v1.2.pdf<\/a>, accessed November 2016.<\/p>\n

4<\/sup> Cargill, 2016 Annual Report.<\/p>\n

5<\/sup> Greg Page, \u201cClimate Change: Can we afford to play with loaded dice?\u201d speech given at Indiana Governor\u2019s Agriculture Conference, Indianapolis, Indiana, January 16, 2015.<\/p>\n

6<\/sup> Burt Helm, \u201cClimate Change\u2019s Bottom Line,\u201d New York Times<\/em>. January 31, 2015, http:\/\/www.nytimes.com\/2015\/02\/01\/business\/energy-environment\/climate-changes-bottom-line.html<\/a>, accessed November 2016.<\/p>\n

7<\/sup> Ripple et. al, \u201cRuminants, climate change and climate policy,\u201d Nature Climate Change<\/em>. January 2014, vol 4.<\/p>\n

8<\/sup> Nikos Alexandratos and Jelle Bruinsma, \u201cWorld Agriculture towards 2030\/2050,\u201d ESA Food and Agriculture Organization of the United Nations Working Paper No. 12-03, June 2012.<\/p>\n

9<\/sup> Ripple et. al, \u201cRuminants, climate change and climate policy,\u201d Nature Climate Change<\/em>. January 2014, vol 4.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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