Corporate responsibility and hurricane damage

North Carolina CAFO

CAFO, September 18, 2018, Photo by Larry Baldwin, Crystal Coast Waterkeeper

Last week, IATP published Hogwash and its aftermath: Climate change and corporate accountability after Hurricane Florence. This article continues our look at the intersection between climate change and the industrial meat system.


Just as many communities in the Southeast were picking up the pieces from the torrential rains of Hurricane Florence, along came the high winds of Hurricane Michael. In this age of climate volatility, stronger hurricanes are coming—along with their high costs for recovery and rebuilding. Researchers estimate that Florence was approximately 50 percent more powerful because of climate change, related to warmer ocean temperatures and more moisture in the air. Moody’s Analytics initial estimates of Hurricane Florence’s costs are between $38-$50 billion. North Carolina alone estimates $13 billion in damages and an estimated $2.4 billion in agriculture-related losses.

One tragic outcome of Florence was the pollution of many North Carolina waterways from the breach or overflow of giant hog manure lagoons. Many of North Carolina’s hog operations are either owned or supply the global pork giant Smithfield. The risks of overflowing manure lagoons, many located in flood plains, has been well known in the state since Hurricane Floyd in 1999. Do Smithfield and other companies benefiting from the large-scale hog and poultry system built in hurricane prone regions of North Carolina have a financial responsibility for the state’s clean-up and rebuild?

In its most recent SEC filing, Smithfield noted “weather” as a major risk factor for the company. In particular, “Natural disasters, such as flooding and hurricanes, can cause the discharge of effluents or other waste into the environment, potentially resulting in our being subject to further liability claims and governmental regulation as has occurred in the past.”

In 2016, the company acknowledged the urgency to address climate change by setting goals for reducing greenhouse gas emissions, pledging to reduce absolute greenhouse gas emissions (GHG) emissions by 25 percent by 2025. As my colleague Shefali Sharma wrote last week, it’s unclear how the company will calculate the release of hog manure (linked to GHG emissions) from its own operations, or those it contracts with, in relation to the its GHG reduction goals.

Smithfield has also been working closely with Duke Energy on a captured methane gas project, designed to reduce its GHGs. Under that project, Duke Energy meets a state renewable energy portfolio requirement by capturing methane emissions from manure lagoons at Smithfield’s operations. Duke Energy also is connected to water contamination, reporting the spill of three toxic coal ash dumps due to rising waters from Hurricane Florence. The company continues to push for the fracked gas Atlantic Coast pipeline to be built through several hurricane-vulnerable North Carolina counties that were hit by Florence.

Smithfield is not the only agribusiness firm in the Carolinas acknowledging the risks of climate change to their operations. In its 2017 financial filing, poultry company Sanderson Farms wrote that, “Some scientists believe that climate change could increase the frequency and severity of adverse weather events.” Sanderson reported 1.7 million poultry dead from Florence.

The financial disclosure of climate risk is gaining importance among investors. Earlier this month, the Financial Stability Board released an analysis showing that the majority of companies surveyed, including more than 200 in the agriculture sector, were disclosing the risks of climate change to their business, though few disclosed the explicit financial risk to the company. Investors are increasingly pressuring the meat industry to improve water quality and fertilizer use, and corporate buyers like McDonald’s and Wal-Mart are asking for lower GHGs from their meat suppliers.

In North Carolina, an estimated six hog manure lagoons breached, 33 discharged, and another 10 had surface water entering the lagoon, according to the North Carolina Department of Environmental Quality’s running tally. Most of those hogs and associated lagoons are located in predominantly African American communities. A Duke University study published earlier this month found that people living near North Carolina’s hog facilities had higher rates of mortality associated with a variety of diseases. Residents from these communities successfully won nuisance lawsuits against Smithfield this year, winning nearly $500 million in damages related to quality of life issues like limiting their time outdoors because of the stench.  

In this age of climate change, any rebuild should not just be considered in terms of cost, but also what proactive steps can be taken to limit or prevent damage from the next weather event. One obvious step in North Carolina is to rethink the rural landscape in flood plains and near waterways, particularly as they relate to the large-scale, manure lagoon model of production. Smithfield CEO Ken Sullivan said the company “will take a fresh look” at the location of its operations near and in flood plains in North Carolina in the wake of Florence.

After Hurricane Floyd in 1999, North Carolina initiated a voluntary buyout program for hog facilities still located on flood plains. Under the $18.7 million program, operators could access funding if they put a conservation easement on the facility—meaning it would not return as a confined animal feeding operation (CAFO). According to Waterkeepers Alliance, applications for the buyout program far exceeded the money available in the four application periods. The initiative closed an estimated 43 applications (out of 138 applicants) before the money ran out. An additional $5 million in state and federal money was added to the program earlier this year, but it remains enormously under-funded. An estimated 62 facilities remain in the floodplain with an estimated 47 more within 100 feet of the floodplain.

As North Carolina begins a costly recovery and rebuild, it is fair to ask what the financial responsibility is of Smithfield, Duke Energy and other companies who benefit from operations that both emit GHGs and are likely to pollute waterways when the next hurricane hits. Of course, North Carolina is not the only state whose farming operations are vulnerable to climate change. And despite rising incidences of extreme weather events around the country, from droughts to wildfires, too few states are doing climate adaptation planning for agriculture. In a report IATP published earlier this year, only 18 states had even taken initial steps toward climate adaptation planning for agriculture.

Farmers and rural communities are now routinely hit with extreme weather events in this new age of climate change. As governments at the national, state and local level grapple with these challenges and costs, they should consider the financial responsibility of corporations who have knowingly increased our climate risk.