Companies in Action
The Coca-Cola Company disclosed financial and reputational risks of water scarcity and climate change in its 10-K and integrated business and sustainability report. In 2018, The Coca-Cola Company integrated its sustainability and annual reports to clearly demonstrate the company’s vision for long-term value creation and risk management. The report provides a variety of comparable, externally verified data and demonstrates how the company is managing ESG risks and opportunities from the board room through to its bottling partnerships. For example, Coca-Cola has noted in its financial disclosures that water shortages driven by climate change pose a risk to its production chains and profitability. This disclosure can be found in the Coca-Cola's 2019 Business and Sustainability Report and 10K, where the company discloses its sustainable business priorities alongside and often intertwined with its financial performance, demonstrating how sustainable business priorities are drivers of corporate strategy and decision-making.
Kellogg Company presents climate change as a core business issue and underscores risks and opportunities for investors. Investors and the broader stakeholder community are increasingly asking companies to integrate sustainability risks and opportunities into strategy and long-term planning and for companies to articulate these connections through different forums. Responding to this expectation, Kellogg’s 2019 annual report and 10-K explicitly state how the company is integrating risks related to climate change and food security into both its growth and sustainability strategies. Importantly, the company discloses how it is evaluating these risks in its short, medium and longer-term time horizons. The company calls out climate change as a core business issue for the company, one that threatens the viability of the ingredients used in its products given the strong connections between climate change and a resilient agricultural system. In addition to the discussion on risks, Kellogg leverages its annual report to reinforce the role of the board and senior leadership in overseeing sustainability efforts and share key sustainability initiatives and targets.
MGM Resorts International discloses the physical and reputational risks posed by climate change in both its 10-K and annual report. In addition to disclosing its efforts to address climate change in its Social Impact and Sustainability Report, MGM discloses the business risks associated with climate change in its mandatory financial filings. The company instituted this practice in 2010, when it began disclosing on climate risks in its 10-K, eventually carrying this practice over to its annual report beginning in 2018. In both filings, MGM outlines the physical risks extreme weather events caused by climate change could have on its properties and operations and ability to attract visitors. In terms of reputational risks, like many companies, MGM states that its business faces increased scrutiny related to ESG activities and that it risks damage to its reputation and brand value if it fails to act responsibly in a number of areas, including environmental stewardship and climate change.