Wednesday, August 17, 2011

Global warming could deliver a jolt to coffee lovers

Josh Rubin in the Toronto Star: Global warming could deliver a jolt to coffee lovers – and not the kind they’ve come to crave first thing in the morning. Up to 60 per cent of the world’s coffee-growing regions will no longer be viable by 2050 thanks to climate change, according to a recent estimate from the Global Coffee Quality Research Initiative.

And that, says Trillium Asset Management researcher Jonas Kron, represents a major financial risk for companies who count on coffee for their profits. Trillium and Calvert Investment Management, Inc. called on U.S. consumer products giant Smucker’s to produce detailed disclosure of climate-related risks as part of its financial statements. “I’m not prone to hyperbole, but climate change is going to be the biggest financial issue for the next generation,” said Kron, adding that Smucker’s got 40 per cent of its revenues and 48 per cent of its earnings from coffee last year.

Calling for that kind of detailed disclosure is one sign among many that concern over global warming has shifted from protesters and activists to the board room. Experts say changing weather patterns will have an effect on everything from the size of ships that can ply the Great Lakes and St. Lawrence River to the long-term viability of grain farming on the North American prairies.

Even financial regulators are adding to the concern, acknowledging climate change is a “material risk” for many companies. Last year, both the U.S. Securities and Exchange Commission and the Canadian Securities Administrators unveiled new guidelines for how companies should disclose the risks they face from environmental change...

Coffee beans shot by Aaron Logan, Wikimedia Commons, under the Creative Commons Attribution 2.5 Generic license

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