With the intensifying negative effects of climate change placing an unprecedented strain on our world’s water supply and quality, along with steadily increasing demand for water-intensive goods from a rising global population, companies must evaluate, manage, and mitigate their water risks in order to offer competitive returns to their investors over the long term.
Food companies are uniquely vulnerable to the water crisis, as growing and processing food consumes more than 70% of the world’s increasingly strained water resources. Without proper management and disclosure of water-related risks, companies increasingly face market, financial and reputational risks, and lose out on new market opportunities.
Agricultural supply chains, which contain the bulk of the food sector’s exposure to water risks, stand out as an area in need of critical improvement. Less than half of the companies analyzed performed robust water risk assessments (inclusive of water quality) that focus on their agricultural supply chains. Highly-stressed areas in these supply chains are not getting the attention they need from companies - only a handful of companies have implemented water use reduction targets or provided support for farmers in high-stress water basins.
This is the fourth and final edition of Feeding Ourselves Thirsty. Since Ceres began tracking this information in 2015, some companies have shown steady improvement. 71% of companies now consider water risks as part of their major business planning activities and investment decisions, up from 58% in 2019. More than half of companies (53%) tie executive compensation to water and sustainability performance (up from 33% in 2019), and 87% of companies are providing educational support to farmers to encourage adoption of practices that reduce impacts and dependence on water (an increase from 70% in 2019).
The top scoring companies, out of a possible score of 100, by industry were: Coca-Cola with 90 (Beverage); Unilever with 83 (Packaged Food); Cargill with 67 (Agricultural Products); and Tyson Foods with 37 (Meat); Coca-Cola, Anheusier Busch, and Unilever top the list of highest overall scores.
For past editions, please see the 2015, 2017, and 2019 executive summaries.