Absent From Climate Commitment Letter: Louisville's Top Companies, U of L

In response to President Donald Trump’s decision to remove the United States from the Paris Climate Accord, cities, states, universities and companies have been publicly affirming their commitment to climate action.

As of Wednesday, about 150 cities and counties, more than 200 colleges and universities and more than a thousand businesses have signed an open letter declaring their continuing support for climate action to meet the goals the U.S. agreed to in the Paris Accord. Louisville is one of those cities — Mayor Greg Fischer signed the letter last week.

The letter is a project of a number of environmental non-profits and sustainability-minded business groups. It reads, in part:
“In the U.S., it is local and state governments, along with businesses, that are primarily responsible for the dramatic decrease in greenhouse gas emissions in recent years. Actions by each group will multiply and accelerate in the years ahead, no matter what policies Washington may adopt. "In the absence of leadership from Washington, states, cities, colleges and universities, businesses and investors, representing a sizeable percentage of the U.S. economy will pursue ambitious climate goals, working together to take forceful action and to ensure that the U.S. remains a global leader in reducing emissions.”
But absent from the list (so far) are any of the city’s large, publicly traded companies and the University of Louisville.

U of L

Despite making strides over the past few years insignificantly cutting greenhouse gas emissions, investments in sustainability programs and cutting-edge research into alternative fuels, university spokesman John Karman said there aren’t any plans to sign the letter.

“At this point, we have not made plans to sign the letter,” Karman wrote in an email.

The only university or college in Kentucky that’s a signatory so far is Berea College.

The Companies

Together, Louisville’s 10 largest publicly traded companies bring in nearly $86 billion annually. They include names you probably know — Humana, Yum! Brands, Papa John’s and Churchill Downs — and ones you probably don’t — Almost Family Inc. and Turning Point Brands.

Of those 10 companies, most didn’t respond to repeated messages inquiring whether their companies were likely to sign the letter. But many of these companies have already listed climate change (or the extreme weather events which scientists link to climate change) as risk factors from their businesses.

Because all of these companies are publicly traded on the U.S. Stock Exchange, they’re required to file annual reports for investors. Those reports include any risk factors that could potentially affect the company’s bottom line, from government regulations to decreased demand to labor shortages.

And despite their unwillingness to call a reporter back to talk about climate change, many of the companies recognize that climate change — or regulations prompted by climate change — could have an effect on their bottom lines.

Here’s what some of those Securities and Exchange Commission filings had to say:

Kindred

Kindred Healthcare doesn’t make any mention of climate change in its 2017 annual report. But back in 2016, the company considered it a big enough risk to spend a paragraph on the subject:
“Climate change could have a potential economic impact on us and climate change mitigation programs and regulations could increase our costs. Energy costs could be higher as a result of climate change regulations. Our costs could increase if utility companies pass on their costs, such as those associated with carbon taxes, emission cap and trade programs, or renewable portfolio standards. In addition, climate change may increase the frequency or intensity of natural disasters. As such, we cannot assure you that climate change will not adversely impact our business, financial position, results of operations and liquidity.”

Brown-Forman

Liquor producer Brown-Forman relies on raw materials to produce its beverages. As such, the company explicitly sees climate change as a risk factor that could affect production in the future. From the company’s 2017 SEC annual report:
“Weather, the effects of climate change, diseases, and other agricultural uncertainties that affect the mortality, health, yield, quality, or price of the various raw materials used in our products also present risks for our business, including in some cases potential impairment in the recorded value of our inventory. Changes in weather patterns or intensity can disrupt our supply chain as well, which may affect production operations, insurance costs and coverage, as well as the timely delivery of our products to customers. “Water is one of the major components of our products, so the quality and quantity of available water is important to our ability to operate our business. If droughts become more common or severe, or if our water supply were interrupted for other reasons, high-quality water could become scarce in some key production regions for our products, including Tennessee, Kentucky, California, Finland, Canada, and Mexico.”
In an emailed statement, Brown-Forman spokesman Phil Lynch touted the company's sustainability work.

"We have set an aggressive target to reduce absolute B-F greenhouse gas emissions by 15% by 2023 (using a 2012 baseline)," he wrote. "Taking into account our anticipated business growth, this decrease in our overall carbon footprint represents approximately 40% versus business as usual. We believe this commitment is more important than taking sides in a noisy political debate."

Papa John’s

Papa John’s — the pizza company that’s owned by prominent Republican donor John Schnatter — also warns investors that climate change could hurt the company’s ability to source its ingredients.
“Our Company-owned and franchised restaurants could also be harmed by a prolonged disruption in the supply of products from or to our QC Centers due to weather, climate change, natural disasters, crop disease, food safety incidents, labor dispute or interruption of service by carriers. In particular, adverse weather or crop disease affecting the California tomato crop could disrupt the supply of pizza sauce to our and our franchisees’ restaurants. Insolvency of key suppliers could also cause similar business interruptions and negatively impact our business.”
Of the remaining seven companies, several avoided explicitly mentioning climate change, but acknowledged extreme weather events could wreck havoc with their business models.

Texas Roadhouse

Texas Roadhouse spokesman Travis Doster is the only person who called back to talk about the issue. He said the company was not planning on signing any kind of climate change action commitment.

“We don’t think anybody really looks at Texas Roadhouse and says ‘Hey, I wonder what they think about this issue or that issue,’” Doster said. “We’re focused on legendary food, legendary service, focus on what we can control. We just don’t presume to think that people want us spouting off our views on certain things, because we’re made up of a lot of individuals and Texas Roadhouse doesn’t have these beliefs that we’re going out and pushing to other people.”

Despite that, Texas Roadhouse does warn its investors that extreme weather — which in some cases, scientists have linked to climate change — could hurt the company’s business.

From the SEC annual report:
“Our ability to open new restaurants will also depend on numerous other factors, some of which are beyond our control, including, but not limited to, the following… the impact of inclement weather, natural disasters and other calamities.”

Churchill Downs

Gambling and gaming giant Churchill Downs also acknowledged the havoc weather could wreak on its moneymaking endeavors.
“A disruption or failure in our systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack or other catastrophic event could interrupt our operations, damage our properties and reduce the number of customers who visit our facilities in the affected areas. Flooding, blizzards, windstorms, earthquakes or hurricanes could adversely affect our locations.”

Almost Family, Inc.

Almost Family is a home health care nursing services company that’s based in Louisville. According to its SEC filings, it has a number of facilities on the coast, which could be affected by natural disasters.
“A substantial number of our agencies are located in Florida or coastal regions in the northeast, increasing our exposure to hurricanes and other natural disasters.  The occurrence of natural disasters in the markets in which we operate could not only affect the day-to-day operations of our agencies but also could disrupt our relationships with patients, employees and referral sources located in the affected areas.”
The remaining companies in the top 10 — Humana, Yum Brands, PharMerica and Turning Point Brands — make no mention of weather or climate change as risk factors.

This post has been updated.