Cargill

CASE STUDY ON IMPACT OF CLIMATE CHANGE

Anubhuti Mittal
Presented By: Group 3 Neha Agnihotri
Shabiya Ansari
Shambo Mitra
Sudhananda Mallick
Suraj Saurabh
How Agribusiness Industry is unique in context of changing
climate?

• Agricultural output is completely climate dependent

 Irregular rainfall
 Extreme weather conditions
 Floods and Drought
• Climate change affects soil fertility
• Extra Expenses
 Greenhouses for crop production
 Artificial environment for cattle rearing and breeding
What are the challenges which industry in general and Cargill in
particular face?

Challenges faced by industry

Public are more aware of climate change, hence brand image depends on measures taken
Increased regulations by governments means industry has to adapt or pay
Natural disasters lead to losses worth crores for industries located in affected regions
Raw materials become scarcer and harder to gather

Challenges faced by Cargill

Protests and criminal lawsuits from environmental groups
Farmers are sceptical about climate change
Various incidents such as the phosphoric acid spill, explosions of plants with toxic chemicals,
illegal dumping of chemicals and waste water, and multiple violations of the Clean Air Act meant
that Cargill could no longer remain tight-lipped
Increased economic costs leading to lower margins
Objectives of Risky Business Project
Core Objectives:
◦ Assessment of economic risks associated with climate change; Current and potential
impacts of climate change
◦ Targeting the most risky economic sectors and preparing strategic responses

Motives:
◦ Depoliticizing the climate change debate
◦ Forming a guiding committee of well positioned individuals
◦ Preparing for the financial and social impacts of extreme weather events
◦ Accurately assessing the cost of extreme weather events
◦ Framing climate change in economic language
◦ Quantifying potential future costs
◦ Helping leaders from the risky sectors to prepare a measured response
Critical Analysis of Risky Business
Initiative
Demerits:
If economic impact is understated, businesses may feel that the costs for preparing climate
change countermeasures outweigh the risk associated with climate change
If economic impact is overstated, companies may spend too much capital on climate change
initiatives which may have been better utilized elsewhere
Role and Challenges of Stakeholders in addressing the issue
Big Business :
Role : Focused to implement sustainability measures to gain the first mover advantage,
……………………….comply with environmental norms
Challenges : Increased cost pressure due to sustainability initiatives
Farming Community :
Additional cost at narrow profit margin due to climate change legislations
Internal stakeholders :
Role : Develops a corporate a culture that would position the company for log term growth.
Challenges : Unpredictable acquisition or divestiture
CEO’s Actions :
 Developing relevant policy program to reduce ecological footprints
 Framing appropriate portfolios to approach climate change issues
 Voluntary adaptation to environmental policies and norms
 Alternative solutions to adapt climate change and ensure business sustainability
 Adopt agricultural practices to curb GHGs