Roles of company directors and the implications for governing for the emerging impacts of climate risks in the fresh food sector: A review

Abstract

The causal link between climate change and food safety is now well established. The role of directors is to govern their organizations. Good governance includes contributing to and overseeing strategy, risk management, legal compliance, and financial management. It also means keeping fresh food safe in their supply chains. Corporate responses to addressing new food safety risks will be critical for ensuring the secure supply of safe food globally. The linkage of climate change to fresh food safety was reviewed and analyzed. Implications are discussed based on the changing governance and regulatory landscape for individual directors, their boards, and organizations in the sector. The review identifies technical impacts as well as emerging governance requirements (including transition risks) for directors. This paper takes the perspective of directors of organizations in the fresh food supply chain (also referred to as the food safety chain) and reviews available and credible knowledge concerning climate risks. Academic and selected grey literature, regulatory position papers, investor and expert opinions, and company annual reports, were reviewed to gain insights into the direct impacts on fresh foods and financial risks from climate change and identify emerging regulatory trends in governance. While there is an identifiable link between physical threats from climate change in this area of agriculture and food production and the management of businesses in the fresh food value chain, the governance of the overall food safety chain is diverse and robust. There is extensive research underway to assess emerging risks, with international laws and standards that enable the mitigation of emerging threats. While manifesting for directors as transitional risks, each of these aspects of governance offers an opportunity for organizations (in the food value or food safety chain) to be proactive about fresh food safety. Understanding the changing expectations of directors concerning the impact of climate change, which is diverse as this review shows, has not been reviewed previously. The current study will help ensure that organizations can prepare for the inevitable climate-related impacts that will challenge the global supply of fresh food and need to be governed at a company level to anticipate these emerging risks successfully.