Environmental, social and governance (ESG) risks are increasingly impacting the food and beverage sector as it faces the combined challenges of controlling the environmental impact of production processes and supply chain disruption.
In a new global survey, WTW, a leading global advisory, broking, and solutions company, outlines the pressures facing the food and beverage sector as a result of the turbulence of the last two years from the impact of the pandemic to the supply chain disruption caused by global volatility, particularly regarding the conflict between Russia and Ukraine, which is likely to have a significant impact on global food supplies.
The survey also found:
- Brand and reputation, which is heavily linked to sustainability, is a big risk (46%), yet 55% had no reputational cover.
- 73% said their company had no specific insurance for environmental risk and 67% did not have cyber risk cover. 42% did not have cover for product recall. All of which were ranked as risk factors.
- External factors beyond the organisation’s control, including geopolitical factors (60%) and economic factors (60%) were seen as the biggest challenges to mitigating risk in the medium term.
- Despite the challenges of the last two years, 70% are optimistic that the sector will be more profitable over the next two years with organic food (48%) topping the list of growth opportunity.
The survey was conducted with 250 senior executives in food production, processing and manufacturing organisations, across the globe, and across different categories including confectionary, snacks, bakery, cereals, dairy, brewing, distillery and soft drinks.
Garret Gaughan, Head of Direct and Facultative, said, “While this survey was undertaken prior to the current geopolitical situation, we recognize that the food and drink sector is undergoing a wide variety of disruption caused by a number of seismic events, not least the situation in Ukraine / Russia. However, this survey also demonstrates the food and beverage sector’s growing awareness of the impact of ESG on this sector which is also reflecting the changing nature of f consumers who are increasingly concerned about sustainability and how their food is produced and the ingredients within it, as well as the impact of climate change on supply chain.”
For more information please visit: – https://www.wtwco.com/en-GB/Insights/2022/04/global-food-and-beverage-survey-report