By Ciara Linnane, MarketWatch
The growing popularity of plant-based meat and other substitutes has spurred a rapid response from big meat companies, keen to capture a share of a market estimated to be worth $140 billion in 10 years time.
Could the evolution also act as a catalyst for a water-gulping industry to take the management of this resource more seriously?
Meat companies are among the most vulnerable to water risks, from flooding to drought to contamination, and yet they got the lowest scores in a new report from sustainability organization Ceres on water management.
The report, called Feeding Ourselves Thirsty, studied 40 food companies, most of them publicly traded with shareholders to answer to, and found meat companies are not just the worst at addressing water risk, they are one of the biggest users of water and one of the biggest polluters of watersheds globally.
The meat and dairy industry consumes about 40% of the grain grown as animal feed and accounts for 45% of irrigation demand for crops, Ceres data shows. That’s had the effect of draining aquifers in the Midwest and the West, the group told MarketWatch.
“Meat is the biggest laggard in managing water risk and it’s having a real financial impact on their businesses,” Brooke Barton, vice president of innovation and evaluation at Boston-based Ceres, and a co-author of the report, told MarketWatch in an interview. “The impact of meat production on water quality will be exacerbated as flooding becomes more frequent and severe due to climate change.”
A low water-management score
The report grouped the 40 companies into agricultural products, beverages, meat and packaged foods sectors and ranked them from zero to 100 based on their water management approach. The highest score — 87 — went to Anglo-Dutch giant Unilever /zigman2/quotes/204685760/composite UL +2.62% , which it ranked as a packaged food maker. The lowest went to poultry producer Sanderson Farms Inc. /zigman2/quotes/201978364/composite SAFM -1.45% , which scored zero.
That means the company has no board oversight for water risk management; it does not tie the compensation of senior management to water targets or strategy; it does not assess water risks in direct operations; it does not assess it in its supply chain; it has no targets for sustainable sourcing goals for key commodities; and it does not offer farmers financial help to adopt practices that would reduce their water impacts.
A Sanderson Farms spokesperson was not immediately available for comment.
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Meat companies overall scored just 18, which was up from 11 in 2015, when Ceres conducted its first water study. (Packaged foods took the highest score and showed the most improvement with a score of 47, compared with 31 in 2015. Beverage companies took second place with a score of 44, up from 23, while ag products scored 30, up from 13 in 2015.)