{"id":24900,"date":"2017-11-15T18:42:51","date_gmt":"2017-11-15T23:42:51","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/kellogg-changes-so-the-climate-wont\/"},"modified":"2017-11-15T18:42:51","modified_gmt":"2017-11-15T23:42:51","slug":"kellogg-changes-so-the-climate-wont","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/kellogg-changes-so-the-climate-wont\/","title":{"rendered":"Kellogg Changes so the Climate Won\u2019t"},"content":{"rendered":"

Kellogg\u2019s global supply chain is under growing pressure due to climate change.\u00a0 Kellogg both contributes to and is adversely impacted by climate change.\u00a0 Patterns of increasingly extreme weather pose significant threats to the suppliers from which Kellogg sources many of its ingredients.\u00a0 However, the company is taking steps to address the threats posed by climate change by curbing energy use, reducing water use, limiting waste, and sourcing products from responsible partners1<\/sup>.<\/p>\n

Climate change is concerning to Kellogg because it threatens to disrupt the company\u2019s supply chain.\u00a0 Kellogg procures its main ingredients, including wheat, corn, rice, potatoes, and sugar, from a complex global network of farmers around the world2<\/sup>.\u00a0 Many of these growers live in developing countries and have historically relied on precise climate conditions to prosper.\u00a0 However, the impacts of climate change, including hotter average temperatures, more severe weather patterns, and rising global sea levels, threaten the delicate climate balance that has allowed farmers in developing countries to be competitive in the global market3<\/sup>.\u00a0 If these farmers can no longer produce reliable crop outputs, Kellogg\u2019s supply chain will be interrupted, as the company\u2019s partners will no longer be able to grow enough crops to meet demand.\u00a0 If we amplify this issue across the entire food and beverage landscape, it is plausible that there will be significant global food shortages in the future due to the impacts of climate change.<\/p>\n

Kellogg has taken several steps to address climate change4<\/sup>, utilizing a strategy combining adaptation (responding to climate change) and mitigation (lessening the company\u2019s contribution to the drivers of climate change).\u00a0 The company\u2019s short-term goals revolve around adaptation.\u00a0 Kellogg is making efforts to help its suppliers increase acreage outputs and become less vulnerable to the impacts of climate change by educating farmers on smarter, more adaptable farming practices.\u00a0 In the medium term, Kellogg plans to implement mitigation strategies to reduce its contribution to climate change.\u00a0 The company has committed to reducing greenhouse gas emissions and energy consumption by utilizing renewable energy, rather than fossil fuels, in many of its facilities.\u00a0 Kellogg also plans to reduce the amount of material used in its packaging, thereby reducing the amount of fuel consumed (and, therefore, greenhouse gases emitted) transporting materials to manufacturing plants.\u00a0 Additionally, Kellogg is seeking to reduce the amount of water used in its production facilities to lessen its burden on the global clean water supply, thus increasing water availability for its supply chain partners globally and aiding in their survival and the supply chain\u2019s continuity.\u00a0 Finally, the company plans to thoroughly vet its suppliers and focus its procurement efforts on sourcing from responsible producers who practice sustainable and environmentally friendly farming practices.<\/p>\n

In addition to the climate change adaptation and mitigation steps to which Kellogg has already committed, I would suggest that Kellogg explore packaging material alternatives in the short term and identify supply chain localization opportunities in the medium term.\u00a0 Many of Kellogg\u2019s products include plastic components, a major ingredient of which is petroleum5<\/sup><\/span>.\u00a0 Petroleum is a fossil fuel whose extraction has been linked to geological instability6<\/sup> and whose use is a major source of greenhouse gas emissions7<\/sup>.\u00a0 By switching to alternative packaging materials, Kellogg will be able to help the world move away from its reliance on fossil fuels like petroleum and further mitigate its contributions to climate change.\u00a0 Additionally, Kellogg should explore building a more localized supply chain.\u00a0 Currently, Kellogg procures ingredients from around the world, ships them to factories, and distributes the final products to its global customer base.\u00a0 If Kellogg can move major operations closer to its main ingredient sources or procure ingredients from suppliers closer to its production facilities, the company would be able to minimize the amount of transportation used in its supply chain.\u00a0 Transportation, especially the use of petroleum product-burning cargo ships and trucks, is a major producer of greenhouse gases, which contribute to climate change8<\/sup>.<\/p>\n

One of my main open concerns about the context of climate change as it relates to Kellogg\u2019s supply chain surrounds how the company plans to balance shareholder financial demands with the increased cost basis required to address climate change concerns.\u00a0 Will shareholders accept depressed financial returns in exchange for a more environmentally friendly business model?\u00a0 Are consumers willing to pay more for products created using sustainable supply chains?\u00a0 If so, is Kellogg able to educate the population on its practices and pass the increased costs through to customers in the form of higher prices?<\/p>\n

 <\/p>\n

(736 words)<\/p>\n

 <\/p>\n

1<\/sup>Kellogg Company, \u201cKellogg 2016\/2017 Corporate Responsibility Report,\u201d June 2017.<\/p>\n

2<\/sup>Kellogg Company, \u201cKellogg Company Global Sustainability 2020 Commitments Goals,\u201d July 2015.<\/p>\n

3<\/sup>Port of Long Beach, \u201cPort of Long Beach Climate Adaptation and Coastal Resiliency Plan,\u201d Fall 2016.<\/p>\n

4<\/sup>Kellogg Company, \u201cKellogg 2016\/2017 Corporate Responsibility Report,\u201d June 2017.<\/p>\n

5<\/sup>U.S. Energy Information Administration, \u201cFrequently Asked Questions,\u201d https:\/\/www.eia.gov\/tools\/faqs\/faq.php?id=34&t=6, accessed November 2017.<\/p>\n

6<\/sup>Anna Kuchment, \u201cDrilling for Earthquakes,\u201d Scientific American<\/em> 315 (2016): 46-53.<\/p>\n

7<\/sup>Lee Chapman, \u201cTransport and climate change: a review,\u201d Journal of Transport Geography<\/em> Volume 15, Issue 5 (September 2007): 354-367.<\/p>\n

8<\/sup>Ibid.<\/p>\n","protected":false},"excerpt":{"rendered":"

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