Perdue Farms, Smithfield Foods, JBS and Cargill all received letters from 45 investors wielding more than $1 trillion in assets, pressing them to tackle water pollution risks.
The financiers are all members of the non-profit sustainability organisation Ceres and the Interfaith Centre on Corporate Responsibility (ICCR).
However, in a statement responding to the initiative a spokesman for Perdue Farms said: “Perdue has a record of protecting water quality and implementing water conservation programs. We strive to operate at or better-than compliance levels, and move quickly to address any issues.
“We are the only poultry company recycling poultry litter through our Perdue AgriRecycle operation on Delmarva. Environmental stewardship is part of our company values and a factor in our incentive programs, and we have a comprehensive corporate responsibility platform with continuous improvement goals in environmental sustainability.”
'Critical to agricultural economy'
In addition, Chris Schraeder, director, sustainability communications, Cargill, said: "As a leader in agriculture, food and nutrition, Cargill recognizes the strength of our global food system depends on the health of our natural resources and local farming communities. Water is critical to supporting the agricultural economy, and we are committed to advancing sustainable solutions.
“In our operations, we have reduced water use in our North America protein business by 15% over the last decade. We monitor and upgrade our systems to effectively treat wastewater, which is then used to irrigate local farms surrounding many of our facilities. Several of our meat processing facilities provide 100 percent of their treated wastewater to local farm irrigation. Our facility design and operations have built-in water recycling systems to safely use water several times before it is finally treated for discharge.
“We also are working with our customers, competitors, suppliers and conservation groups to improve water stewardship across our supply chains in North America and beyond. This includes the US and global roundtables on sustainable beef; Field to Market; Living Lands and Waters; World Resources Institute; and the recently launched Midwest Row Crop Collaborative, a multi-stakeholder group working to reduce nutrient runoff into the rivers and streams of the Mississippi River Basin. These efforts are part of our commitment to nourishing the world in safe, responsible and sustainable way.”
Water stewardship goals
The investors who signed the letters asked the meat companies they addressed to assess the pollution impacts of their direct operations and supply chains and develop a comprehensive water stewardship policy with related goals that dealt with:
• Noncompliance and minimising permitted releases to waterways
• Safe storage and management of animal waste
• Minimising fertiliser runoff from animal feed production
The letters come one month after Hurricane Matthew inundated poultry and hog farms in North Carolina, flooding manure lagoons and killing more than two million chickens, turkeys and hogs.
Smithfield Foods bounced back swiftly after the disaster, donating 75,000 pounds of meat to food banks for locals hit by devastation and pledging $25,000 to the American Red Cross to support local communities . The company also rolled out counselling sessions, legal consultations, hot meals and transportation to staff reeling from the after-effects.
“As investors analysing water risks in our portfolios, we believe that robust management of water quality challenges is a critical aspect of risk management in the meat industry, and one of increasing importance in the context of climate change,” the investors wrote.
Nadira Narine, ICCR senior programme director and coordinator with Ceres of the initiative, said: “These letters highlight the need for these companies to address the reputational, legal and regulatory risks of being a large polluter.
“All companies need to minimise effluent discharge beyond compliance levels and set related goals and targets.”
Kristel Verhoef, active ownership specialist at ACTIAM, which has €56bn-worth of investments, said: “Broad mismanagement of local water resources can lead to devastating regulatory, reputational and litigation risks, weakening a company’s ability to operate profitably.”
Ceres said several shareholder proposals had been filed with other leading meat sector players, including Tyson Foods, Hormel Foods, Pilgrim’s Pride and Sanderson Farms, calling for improved water management.
Fortunately, some meat companies had begun to respond to water use concerns, Ceres reported. In October, meat processor Hormel Foods, along with several other companies joined the Ceres-World Wildlife Fund AgWater Challenge, an initiative to advance water stewardship in the food sector.
Sister Patricia Daly of the Tri-State Coalition for Responsible Investment said: “Comprehensive water stewardship policies are critical to avoid the risks present at several points in the supply chain of meat producers like Hormel.
“We are encouraged by the company’s commitment following the withdrawal of our shareholder proposal, to put a water stewardship policy in place that will apply to major suppliers, contract animal growers and feed suppliers.”
Last year, Ceres released a report ranking major food companies on water risk management. Several meat companies, including Tyson and JBS, were identified among the worst performers.
Fines for violations of wastewater permits have proved costly for the industry. In 2010, JBS paid $2m over the failure of a facility to comply with the Clean Water Act and the Pennsylvania Clean Streams Law. The company was also required to improve operations by reconstructing wastewater systems at an estimated cost of $6m.