From introducing bans on plastic grocery bags in U.S. states and counties to issuing “blue bonds” to support sustainable marine and fishing projects in the Seychelles, the private, public and investment sectors are addressing environmental challenges that threaten overall sustainability.
Business sustainability is sometimes described as a focus on the “three Ps” – profits, people and planet. Consumers have already shown that they are willing to pay a “sustainability premium” for goods and services. In fact, a recent McKinsey & Company survey of department-store buyers in 25 countries found that 70 percent of consumers were willing to pay extra for sustainably produced goods.
However, organizations seeking sustainable solutions face numerous challenges – no matter what industry they’re in.
One such example is the food and agriculture industry, which is particularly vulnerable to natural disasters. Recent 2019 droughts in Southeast Asia, Central and Northern Europe, South America, and the U.S. resulted in multibillion-dollar losses, and a recent drought in the Eastern states of Australia caused crop production to decline 20 percent year-over-year.
In early March 2019, following more than seven years of historically low water levels dating back to December 2011, California was declared drought-free. “California’s drought really helped push concerns about food production and climate change to the forefront,” says Tami Griffin, U.S. practice leader, Food, Agribusiness & Beverage at Aon.
On the other end of the scale is flooding, another major threat to food and agriculture businesses. In March 2019, floodwaters in the Midwest caused billions of dollars in damage and hit the agriculture industry hard, devastating livestock, destroying grain stores and jeopardizing this spring’s planting.
And weather and climate issues are not the only factors at play. The U.N. forecasts that the global population will reach close to 10 billion by 2050, further straining the world’s food production. Griffin acknowledges, “no doubt this is a complicated global challenge with no easy answer.”
A number of factors can interfere with businesses’ ability to keep their focus on all of sustainability’s “three Ps.” Some are issues challenging society more broadly, such as climate change. Others are more business-specific, such as difficulty in connecting sustainability with business continuity, a lack of industry-wide guidelines or sufficient data (or data analysis) on the impact of sustainability efforts.
Prioritizing Water For Food And Agriculture
For agriculture, the impact of a severe drought can easily go beyond just this year’s crop. “Some farmers in California had to destroy thousands of acres of orchards and other crops because they just didn’t have the water to sustain those plants,” says Griffin. The impact, she explains, can be felt for years since certain crops require significant time between replanting and harvesting.
In some areas, such as Texas, underground aquifers that serve as a region’s primary water source are being depleted faster than they can be recharged. In the future, this could mean disputes between local communities relying on the same water source as agricultural enterprises that use the water for irrigation.
Perhaps it’s no surprise then that food and beverage businesses that use large volumes of water but operate in water-scarce areas could face a backlash from consumers facing personal water use restrictions. Griffin says, “You see a lot of pressure on food and beverage companies around water availability and quality as they look to relocate or build new plants.”
Similarly, businesses that claim to be operating sustainably but whose processes involve wastewater discharges that affect scarce local water supplies could become targets of consumer and political pressure.
Addressing Soil Sustainability
A number of major food industry companies, recognizing the importance of soil health to meeting the world’s food needs, have committed to promoting regenerative farming techniques that enrich soil and support water conservation.
In February 2019, a group of 10 major companies and nonprofit organizations founded the Ecoservices Market Consortium to encourage farmers and ranchers to adopt sustainable practices. These would improve soil health, reduce greenhouse gas emissions, improve water quality and reduce water use across millions of acres, achieving a lasting global impact, according to member organizations.
Understanding Technology’s Role In Sustainable Food Production
In addition to helping agribusiness improve its production processes, technology is also becoming an important tool in the sector’s sustainability efforts.
Precision agriculture, for example, allows farmers to better target irrigation, fertilizer use and pesticide use. “Providing the ability to only treat a specific area with the exact nutrients that are needed – whether it’s through satellite imagery, robotics or detailed data – enables accuracy to improve farm operations,” says Griffin. Sensors, analytics, drones and geospatial technology are among the tools helping farmers use resources more efficiently and operate more sustainably.
Technology that improves food traceability (for example, RFID tags that transmit and receive information, sensors and distributed ledger technology such as blockchain) will support greater farm-to-supermarket food safety while also promoting sustainability. However, this target all hinges on ensuring harmonized standards for data collection and sharing.
“All these technologies will come into play to help make us better stewards of the land – to better understand what the land needs and what the crop needs at that particular moment,” Griffin says.
Recognizing The Risks, Adopting New Methods, Committing To Sustainability
Across industries, achieving sustainability begins with understanding the obstacles to it. Coupled with a commitment to sustainable operation, that understanding can inform a thoughtful strategy for reaching the goal.
In food and agriculture, as elsewhere, part of the answer lies is finding new ways to disrupt current operations. An openness to innovation – along with finding pioneering ways to apply technology – can make sustainability a success, benefitting businesses and society as a whole.
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