Companies including Walmart, Coca-Cola, General Mills, and Unilever have taken steps to work with suppliers on environmental improvements, the report said, but added that measurable goals and firm deadlines are necessary to make real improvements.
The report from Ceres, a Boston-based nonprofit network of investors, companies and public interest groups, focused on climate change's effect on corn production. It said farmers and the companies they supply must address drought and other weather extremes, an increase in groundwater depleting irrigation, and more fertilizer use.
"Climate change and pressures on water supplies pose financial risk to our agricultural industry but it's not just the corn belt's problem," said Brooke Barton, co-author of the report. "Companies that depend on U.S. corn have a big role to play in sending market signals that these issues matter," she said.
General Mills, Coca-Cola and Unilever, have all been working with Ceres and have adopted sustainability programs setting specific goals that suppliers and farmers must meet if they want to continue selling ingredients to the corporations.
The report calls on companies to establish goals to reduce their environmental impact, develop procurement contracts that require sustainably grown crops, and make efforts to identify areas of high water stress, groundwater pollution and overuse of fertilizer.
Coca-Cola announced last year it would buy all of its agricultural ingredients from sustainable sources by 2020, including the corn used for its high-fructose corn syrup.
"We know how to make beverages. We don't necessarily know how to grow corn but we do have a good opportunity to influence our suppliers," Jon Radtke, the company's water resources sustainability manager, said after the report was released. "We have shared, obviously, our sustainable ag guidelines principles with suppliers and asked them to meet those and they've developed a plan to implement those over the coming years so we can meet that 100 percent by 2020."
Ceres also recommends that companies substitute other grains for corn where environmental benefits are well-demonstrated.
General Mills, the maker of Cheerios, Wheaties and Green Giant vegetables, began a sustainability program in 2005 and has increasingly been providing money and support to improve the use of water and fertilizer.
In the Root River region of southeastern Minnesota, the company contributed $300,000 to help vegetable farmers incorporate new conservation practices to reduce erosion into the river. In Irapuato, Mexico, General Mills provided interest-free loans to farmers to help them invest in drip irrigation equipment to grow Green Giant vegetables.
Corporations are taking on the additional expense to ensure future supplies, but also because of customer demand, said Jerry Lynch, chief sustainability officer for General Mills.
"More and more consumers are looking at what companies are doing in this area because that really demonstrates the care that a company takes with the ingredients which are the thing that a consumer cares most about in a food product," Lynch said.
Unilever, which makes products including Lipton tea and Hellmann's mayonnaise, is working with Iowa soybean farmers to use a newly developed calculator that measures fertilizer use, water quality, energy use, and greenhouse gas emissions. Soybean oil is a major ingredient in mayonnaise.
Farmers committed 44,000 acres to the project in 2013 and that rose to 150,000 acres this year, said Jonathan Atwood, the company's vice president of sustainable living.
"The intent is to go on-farm and try and find a collection of like-minded farmers to come in and begin to measure at a much deeper level against some of the sustainability targets we have as a company," he said.
Unilever's goal is 100 percent sustainably sourced commodities by 2020. Atwood said the company began at 12 percent in 2010 and achieved 48 percent globally this year.
Ray Gaesser, who farms 6,000 acres of corn and soybeans in southwest Iowa near Corning, uses no-till farming, terraces on sloping land to prevent soil erosion, and has grass waterways to slow water runoff.
Most farmers, he said, are willing to adopt new measures if they are shown to be beneficial to the land and water and do not reduce productivity.
"They want to be sure it's being done for more than just marketing reasons or to position a company to be in a better light with their consumers," Gaesser said. "It needs to be a sincere effort."