April 8, 2013

Money Does Grow on Trees: Why Sustainability is Good for Business

In an increasingly globalized environment, the impact that worldwide trends have on businesses has never been greater. Over the past decade, rising prices for land and energy  have cut into businesses’ bottom-line, making current business procedures unsustainable for the long term. It is only by marrying business savvy with sustainable production that business can maximize their agricultural growth while still staying in the black.

A female laborer works in a potato field in Bangladesh. Photo by Shykh Seraj on Flickr.

KPMG, an industry advisory firm, suggests that over the next twenty years ten “sustainability megaforces”  – climate change; food security; deforestation; water scarcity; energy and fuel; material resource scarcity; population growth; urbanization; wealth; ecosystem decline – will affect every business and must be accounted for in long term planning. The report goes on to explain how these megaforces “do not act in isolation…[but rather] act as complex and unpredictable systems, feeding, amplifying or ameliorating the effects of others”. Though the effects of these forces could be disastrous, if innovative enough, businesses will be able to thrive, in both their bottom line and sustainability.

While KPMG suspects these megaforces to be a force to reckon with in twenty years, enterprising businesses are already trying to respond to an impending new normal. For those looking to pursue the triple bottom line of profit, people, and the planet, the Sustainable Agriculture Initiative (SAI) Platform released a guide in March on Sustainable Sourcing of Agricultural Raw Materials. Through a combination of theoretical models and best practice case studies, the guide presents evidence that being sustainable is not just good public relations, but is in fact a viable and necessary growth strategy for the future. One case study highlighted PepsiCo’s environmental impact reduction strategy as a means for sustainable sourcing.

Through its “50 in 5” project, PepsiCo aimed to reduce its Carbon and Water footprint in the production of Walkers potato crisps by 50% between 2010 and 2015. In pursuing their goal, PepsiCo looked towards technological innovations-such as i-crop and cool farm- alternative energy sources, and new seed varieties to solve the issue by finding more environmentally sensitive ways to grow and irrigate crops while lowering water and fertilizer inputs. PepsiCO replaced 75% of their potato stock with new strains that required less irrigation, were more disease resistant, could easily be stored over longer periods, and required fewer inputs to maintain the same yield ensuring the same high quality potato with less water intensity and carbon emissions. So far the results of “50 in 5” for potatoes have been so successful that the company plans to use this approach when changing the way they grow their oats and apples in the UK.

So why are we discussing business matters on the Landscapes Blog? This week, from April 8th to April 11th, the Sustainable Food Laboratory (SFL) Annual Summit will take place. This year focuses on the theme of “Making It Happen: The Nuts and Bolts of Sustainable Chain”, looking beyond farm-level production to the system as a whole. It will include sessions on landscape-level incentives and measurement, with a workshop held on the final day covering the Landscape for People, Food and Nature Initiative’s Business Case for Integrated Landscapes Approaches. Over the course of the next two weeks, the Landscapes Blog will continue to highlight the role that business can play in ensuring sustainable landscapes, and at the same time illustrate how that triple bottom line of sustainability is also a critical strategy for businesses in the coming century.

Read More

Expect the Unexpected: Building Business Value in a Changing World – KPMG
Sustainable Sourcing of Agricultural Raw Materials: A Practitioner’s Guide – SAI Platform

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