Inside Track, a group of “professionals working within some of the UK’s biggest food producers”, have written a public memo to food company investors, directors, owners and creditors.
They say that the resilience of the UK’s food system is at risk from environmental degradation and climate change and that deep and immediate action is required to address impending crisis.
The memo says, “Yield, quality and predictability of supply from many of our most critical sourcing regions is not something we will be able to rely upon over the coming years. The data on degrading soil health, water scarcity, global heating and extreme weather events back up what we are seeing from within the system: an interconnected set of crises.”
The Inside Track group says, “Most of us have decades of experience and hold or have held senior professional roles across a range of functions in UK food businesses accounting for more than half of UK groceries sales. We are releasing this memo because we have reached a moment of threat to food security like none other we have seen.”
They warn that “These crises will have a meaningful commercial impact on our businesses. Mitigation strategies meanwhile are simply not commensurate with the level of the risk we are facing. We believe that your engagement on these issues could drive action internally that can protect our businesses, our customers, our sourcing communities and your investments.”
They say that current strategies to mitigate climate risks are not material compared to the scale of the threat, which includes deteriorating supply chains and an inability to source.
They say, “What was a long term threat is now a short term threat.”
The group recognises that their claxon is, “A challenge to business model: all of our assets and processes as well as our culture are deeply tied up in the status quo. Our companies are designed for hyper-efficiency in the short term – driving as hard a bargain as we can with a laser focus on short term production. To think differently about relationships with land, suppliers, communities and risk is a cultural challenge for our businesses.”
The group is not asking investors to take their word for it. Instead they say that investors, directors, owners and creditors should test their own confidence by assessing whether they believe that:
- “Our sourcing regions and key commodities are likely to provide stable supply over the next ten years.
- “The collective plans of businesses and government to improve the robustness of supply over the long term in these regions are material enough to manage the risks posed by declining soil health, water scarcity, climate shocks and global heating.
- “Our alternative plans have enough investment and thought that if we do have to find alternative sourcing we will be able to sustain our sourcing in a competitive market on a planet with shrinking capacity for production.”
They ask of boards, “What would be the difference in your approach if you were to treat this issue as a disaster preparedness exercise for a high likelihood and high impact impending crisis? How do the time and energy dedicated to this compare with that which the Board provided in other crises, e.g. Covid?”
The memo concludes by say that the whistleblowers want to open up meaningful conversations on what could be done if we accept that we are walking into inevitable crisis. For example:
- “A candid view on the viability of our businesses if we continue as we are, as a means to open up the conversation about the scale of change we need to consider and to understand the economic value of that change over the medium term
- “Covid response-style government convening of food industry leaders in the businesses’ home country as well as in their key sourcing countries (including farmers, growers and local authorities) to take collective action on these issues
- “Playing a key part in longer-term investment in improving drought and flood resistance, soil health and climate resilience in communities from which we source as well as supporting action on dietary shift
- “Upskilling and demanding more of auditors to provide thorough assurance to boards – or introduction of new third parties who can do this
- “A significant increase in dedicated executive and board-level focus so that these issues do not get lost in short term commercials.”