Food Climate Risk: How Directors Can Act on Warnings

Yesterday a group of senior executives from UK food producers, manufacturers and retailers wrote to their investors. They said climate change, soil degradation and biodiversity loss are cutting yields. They said “resilience” has become swapping ingredients and suppliers. They said boards don’t get the full picture of the risk, and the advice they get isn’t good enough.

They didn’t even sign it.

I’ve read the memo three times and I keep thinking about it. I don’t blame them. I understand why someone who has built a career in this industry wouldn’t put their name to a letter like this. But think about what that tells us. These people are accountable for getting food on shelf. They have the data and the seniority, but they don’t feel able to say this inside their own companies. So they’ve said it to the investors, anonymously, using an NGO instead. They are hoping that someone listens.

That is a governance failure, and the memo can’t fix it, because the memo is the evidence.

Resilience has become a word for plan B

• The memo is right that the industry has turned resilience into a sourcing tactic. Crop failure in one region, switch to another. Ingredient gets too expensive, reformulate.
• This is what it doesn’t say. When one region fails, every buyer goes for the same alternative supply at the same time. We all know how small the pool is. The weather is connected, and so is the buying behaviour. Ten retailers and manufacturers switching to the same backup region in the same month is a scramble for the same harvest, that is not diversification, that’s tactics.
• And the growers you walk away from in a bad year may not be there next year. Every quick exit shrinks the supply base for everyone. We are spending long-term capacity to solve short-term problems, and calling it resilience. It’s irresponsible.

Nobody asks for the risk register because nobody wants to read it

The memo says retailers and manufacturers aren’t consistently asking suppliers for risk registers. I’d go further. For years, not knowing has been the cheaper option. If you don’t ask, you don’t have to disclose, budget, or explain to the board. That’s cowardice.

Between CSRD’s double materiality, due diligence under EUDR, and investors now being handed lists of pointed questions, ignorance has become the expensive choice. It just hasn’t reached the profit and loss yet.

There’s another point too. A risk register written by a supplier who is frightened of losing the contract will say what the buyer wants to hear. So ask what happens in your business to the supplier who tells you their yields will fall by a third next season. If the answer is “we find someone else”, you have told every supplier exactly what to put in their register. And you call that procurement excellence.

Waste is the warning

Buried in the memo is the line that food waste this year has been unprecedented. That should be front-page news in every boardroom, because waste shows up long before profit loss does. Management can hide short term loss with a little cost restructure, but it can’t do it for long. And by the way, it’s not food waste, it’s food loss.

And most of it is your technical manager’s fault. Rejected loads, out-of-spec crops and written-off fields are the earliest signal of a supply chain under strain. In most businesses those numbers are in an operations report that the board never sees.

Specifications themselves are a huge part of the problem. A cosmetic spec in a drought year pushes the loss straight onto the farm. Loosening specs is one of the cheapest adaptation measures available, and hardly anyone does it.

Mark your own homework

Most large food businesses ran climate scenario analysis five or so years ago, when TCFD reporting started. Those reports are sitting in a drawer. No one is doing anything with them, which is an epic fail.

Get them out. What did you expect 2026 to look like? What actually happened? Where were you wrong, and by how much? If the scenarios were wrong, the 2030 targets and capital plans are wrong too.

The memo notes that almost nobody does this. It doesn’t require a big budget. It needs an afternoon and someone with enough experience to understand it and the gravitas to talk about what they learned.

Add up the growth plans

The memo points out that the industry is full of companies all projecting growth in market share and margin. I’d love to see an investor do the math. Add together every major UK food business’s growth forecast and ask whether there is enough land, water and reliable harvest to deliver all of it.

I doubt there is. Which means some of those plans are total fiction, and investors should be asking whose.

The frameworks aren’t the problem. The way we use them is.

TCFD, TNFD and CSRD are being treated as reporting exercises. With climate transition plans dropped from CSDDD, there’s a temptation to do even less.

That would be a huge mistake. For many boards, these disclosures are the only place this risk is ever set out in one document. If they were used properly, they could become a working tool. A simple test: if your sustainability report and your enterprise risk register tell different stories, one of them is wrong, and the board should know which it is and they should put pressure on the leadership team to sort it out.

What a good answer sounds like

The memo gives investors twelve questions but doesn’t describe a good answer. Here are three with the weak and strong answers.

1. Ask which commodities and sourcing regions face the greatest climate exposure. A weak answer is “we have a diversified sourcing strategy.” A strong answer names the commodities and regions, gives the percentage of sales at risk, and explains what happens if two of those regions fail in the same year.
2. Ask whether procurement is pushing too much risk onto suppliers. A weak answer is “we work in partnership with our growers.” A strong answer gives contract lengths and volume terms, says which suppliers were hit this year, and how many of them the business is still buying from.
3. Ask what expertise the board draws on to challenge management’s climate assumptions. A weak answer is “our sustainability committee receives quarterly updates.” A strong answer names independent expertise, someone on or advising the board who has worked inside a supply chain with farmers, and the last time the board heard from a grower directly rather than through a summary slide or a marketing video.

If your board would give the first answer to any of these, it’s worth knowing that before an investor asks.

No more letters

I don’t want to read another anonymous letter next year saying the same things with worse numbers. The people who wrote this one took a risk, well kind of, because we don’t know who they are. The least the rest of us can do is make sure they don’t have to do it again.

I work with a small number of food and FMCG leadership teams on turning CSRD and TNFD from a reporting exercise into real decisions about sourcing, contracts and capital, and I’m open to non-executive roles where I can ask these questions from inside the boardroom. If you are looking for expertise, I’d welcome a conversation.