Don't hold the guac. Folks thinking of hoarding avocados after Chipotle warned in a recent regulatory filing that climate change could cause it to stop serving guacamole and salsa should brush up on how these disclosures actually work.
The buzz launched after liberal blog ThinkProgress noted Tuesday that Chipotle had included in a filing last month a line about how cost increases in food prices due to global climate change could possibly cause it stop serving guacamole and salsa rather than pay the higher prices. The story quickly went viral, getting picked up by CNN Money, NPR, MarketWatch and others.
But while some of the stories are written factually, the headlines may mislead some readers.
The disclosure was listed in the standard risk factors section of the company's 10-K filing, an annual snapshot of the company's finances required by the Securities and Exchange Commission. This part of the document tells investors all the things that could possibly go wrong that could hurt the company's performance.
For instance, Microsoft lists "component shortages" and McDonald's cites "terrorist attacks" as risk factors. But there are no stories being written about how Microsoft might run out of Xboxes, or how terrorists could drive up the costs of a Big Mac.
Neither are there stories about how global warming could hurt Goldman Sachs, despite the investment firm's 10-K cautioning over potential costs from increased regulation related to "rising climate change concerns."
Chipotle agrees.
"This is nothing more than routine and required risk factor disclosure," said Chipotle Communications Director Chris Arnold. "The sky is not falling."
