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A third of the world’s largest food system giants fail to acknowledge any risks associated with fertiliser use and very few consistently publish comprehensive disclosures, according to a new analysis by sustainable finance think tank Planet Tracker.
The report examined 5,000 filings from 45 major food companies — representing combined revenues of $2.6 trillion — between 2018 and 2023. It assessed whether food producers (upstream), manufacturers (midstream) and retailers (downstream) highlighted fertiliser-related risks to investors and other stakeholders.
Even among companies that did disclose such risks, many provided only superficial details. “...more companies need to provide evidence that they assess the risks associated with fertiliser misuse in their own operations and value chains, such as the potential financial cost and declining agricultural yields from fertiliser overuse,” the report stated.
The study assessed some of the world’s biggest food giants, including Coca-Cola, Diageo, Adani Wilmar, PepsiCo, Walmart, Nestlé, Carrefour, Heineken and Mondelez.
Global fertiliser use was at least twice the amount theoretically required to sustain food production, given the highly intensive nature of modern agriculture, the report highlighted.
As a result, the planetary boundary (or global environmental limit) for nitrogen was being exceeded by two to three times each year, largely due to fertiliser misuse in crop production, particularly for wheat, maize and rice.
Fertiliser production and use currently account for 5 per cent of global greenhouse gas (GHG) emissions and contribute to nitrous oxide pollution and eutrophication (nutrients accumulation in a waterbody), both of which pose significant threats to human health and biodiversity.
Target 7 of the Kunming-Montreal Global Biodiversity Framework (GBF) aims to reduce pollution risks by 2030, including cutting excess nutrient losses to the environment by at least half.
The analysis found that 32 per cent of the companies studied had not published a single fertiliser risk disclosure over the six-year period. Only 30 per cent of companies discussed fertiliser-related GHG emissions.
This, the report said, was disappointing given the quantities of fertiliser being used and the serious environmental harms it was causing.
Of the companies surveyed, 53 per cent discussed reducing pollution (including eutrophication), 39 per cent addressed improving agricultural practices (such as tackling fertiliser overuse) and 30 per cent mentioned fertiliser-related GHG emissions.
While companies appeared to be increasingly aware of the risks associated with fertiliser misuse, “significant progress still needs to be made in improving overall company fertiliser risk disclosures and communicating the potential financial impact of fertiliser misuse to investors,” the report added.
Interestingly, food manufacturers — rather than food producers, who directly use fertiliser — were more likely to provide disclosures on the risks associated with fertiliser production and misuse.
“…the fact that a number of upstream (food production) companies are lagging behind their midstream peers when it comes to disclosing the risks they are directly exposed to, is something we believe financial institutions should be questioning,” said the report by Planet Tracker.
Sample this: 69 per cent of upstream companies published at least one report containing a disclosure on fertiliser risks over the six-year period. In contrast, 81 per cent of midstream companies and 54 per cent of downstream companies had done so.
In total, the report analysed 5,165 documents covering a six-year period, containing 2,350 relevant text extracts. The most frequently cited risks covered across all company disclosures related to the environmental impact of fertiliser production and use on external stakeholders.
While many companies understood the general environmental risks associated with fertiliser, fewer disclosed how this could impact their own operations and supply chains.
The companies analysed were headquartered across 19 countries. The United States accounted for the highest number, with 10 companies (22 per cent) on the list, followed by the United Kingdom, Brazil and China, each with four companies.