A coalition of 60 institutional investors have sent letters to 15 publicly traded food companies, including Austin-based Hormel Foods Corp., requesting increased disclosure on how companies are managing clean water risks.
The letters are based on a report by Ceres, a Boston-based nonprofit that advocates for sustainable business practices. You can find the “Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks” .
Ceres conducted the research – which was underwritten by Minneapolis-based McKnight Foundation, among other sources – with environmental, social and governance (ESG) investment research firm Sustainalytics.
The 60 investors are a mix of socially conscious investors and larger mainstream investors. Together, they have $1.9 trillion in assets under management and believe that water risk management is critical to the financial oversight of food and beverage companies.
In a year with several drought-stricken West Coast states, Ceres recommended that companies need better oversight and understanding of water risks, including watershed levels and the relationship between the water and their agricultural supply chains. They also believe the companies need to improve disclosure of water risks.
Ceres looked at four industry groups: agricultural products, beverage, meat, and packaged food. Hormel scored 11/100 on the Ceres report. That was right at the middle of the meat producers industry group. But the meat industrytrailed well behind the beverage and packaged food groups and only a little better than the agricultural products group.
In the letter to Hormel, investors commended the company for setting a goal to reduce water use by 10 percent by 2020, but want more disclosure and transparency regarding their water risks. They’ve asked Hormel to disclose the results of the annual Carbon Disclosure Project’s Water Questionnaire, a standardized questionnaire around corporate water programs. Hormel has completed the questionnaire in the past but hadn’t made those results available.
Hormel is taking steps towards increased transparency. A spokesman, via e-mail, told the Star Tribune that the 2015 questionnaire was recently submitted and will be publicly available after CDP releases its report.
“Our organization will continue to focus on water program management and intends to continue CDP water disclosure in subsequent years,” the company said.
Information on some of Hormel’s water practices is already available at 2014csr.hormelfoods.com/environment/water/
The Ceres report said investors would be looking for additional disclosure from Hormel, including the board’s role in water risk management and how the company works with suppliers on the issue.