When it comes to sustainability reporting, everything that happens from field through harvest, transport, and delivery cascades across food supply chains worldwide. Long before we sit down to enjoy our favorite fruits and vegetables, they have produced a carbon footprint with tremendous environmental impact.
The agribusiness industry is responsible for about 30% of greenhouse gas emissions according to The World Bank. Reducing those numbers starts with collecting and sharing accurate environmental, social, and governance (ESG) reporting data up and down the food chain. The trouble is a lack of consensus on reporting metrics and data collection methods.
Help is on the way. During a session at the International Fresh Produce Association (IFPA) conference last fall, I heard first-hand how the world’s foremost agribusiness brands and policymaking organizations are working to set international reporting standards that meet sustainability mandates.
One of the speakers was Allison Edwards, director of Stewardship Index for Specialty Crops (SISC). SISC is a collaborative of growers, buyers, and environmental non-profits creating science-based sustainability outcome metrics.
“All buyers are asking packers, shippers, and processors to measure in the same way,” said Edwards. “We create metrics with growers because it’s essential that metrics function as internal management tools for the growers to improve their operations and as a yardstick to report outcomes. The goal is for all buyers to be asked for the same information for uniform reporting across companies.”
Sustainable agribusiness metrics are in the works
Roberta Anderson, president of GLOBALG.A.P. North America, said that her organization has begun referencing SISC metric programs as part of its mission to design and operationalize food safety standards.
“People usually think about our integrated farm assurance for fruits and vegetables from a food safety perspective, but we also address worker health and safety and some common sustainability components within that,” said Anderson. “Our upcoming recommendations will be for tracking and measuring key components like greenhouse gas emissions. It will take time for people to get comfortable with that and find the right resources. We are referencing metric programs like SISC.”
ESG reporting directives increase across supply chains
There’s every reason for optimism around the development of commonly accepted sustainability metrics. The entire food supply chain is under pressure to meet more demanding ESG regulations. The US Securities and Exchange Commission has proposed ESG-related disclosure requirements for public companies. Already in Europe, the Green Deal has rolled out a series of legally binding climate targets that include sustainable food standards aimed at making the EU the first climate-neutral region by 2050.
Food distributors and retailers closer to the top of the supply chain are tapped first to provide sustainability-related tracking data to regulators and policy agencies. However, Scope 3 mandates touch everyone down to farmers. Caught in the middle are food manufacturers and shippers. Every participant in the food chain will need to prove compliance to ESG reporting directives that also extend into other areas such as worker conditions and the humane treatment of animals.
Digitalizing for ESG reporting data
Untangling the complex strands of sustainability-related data into a coherent and verified tracking and reporting system will take much more than traditional yearly audits. After the show, I caught up with Gary Decker, industry executive advisor for consumer products and agribusiness at SAP. He told me that reporting cannot be a box-checking exercise or reporting after-thought.
“Efficient and effective sustainability reporting is data-driven from the information in the company’s system, rather than evaluated from an annual audit,” said Decker. “Once agribusiness industry groups establish standards, organizations can use solutions like SAP Sustainability Control Tower to automatically capture data and convert it into retailer-specific ESG benchmarking reports.”
AI modernizes the sustainable food chain
As sustainability benchmarks and reporting requirements evolve, technologies like AI will fuel greater progress. IDC analysts expect 35% of organizations to advance their ESG metrics and data management beyond reporting capabilities, using AI to generate sustainability-driven cost benefits and competitive advantages by this year. They said that 40% of organizations worldwide will consider biodiversity a material ESG issue for their business and have concrete impact mitigation strategies and data management tools in place within three years.
“Innovations like AI coupled with collaborative platforms such as cloud-based networks are an easy way to get sustainability-related data to and from suppliers and partners at any point in the food supply chain,” said Decker. “Collaborating to securely share data, participants across the food chain can track and report sustainability metrics from farmer through retailer to sustainably feed the world.”
Find out more about the data-driven future for fresh produce, from farmer to grocer.
