ESG – document your sustainable development
With an ESG-report you can document you sustainable development.
Farmers deliver essential food, feed and fuel to the world. Sustainability can be defined as minimizing impact on the planet while meeting the needs of consumers and communities.
Your agricultural business, like every business, is deeply intertwined with environmental, social, and governance concerns and the subjects represent possibilities to pursue as well as risks to avoid.
If you own and farm land it is an advantage to begin to document your sustainable efforts and areas of actions in an Environment (E), Social (S) and Governance (G) report sooner rather than later.
What is ESG?
The E in ESG, environmental criteria, includes the resources your company takes in, the waste it discharges, and the consequences for living beings as a result. For an agricultural enterprise important areas to focus on include water and air quality, nature and biodiversity, soil fertility, and optimal resource use. Not least, E encompasses carbon emissions and influence on climate change.
S, social criteria, addresses the relationships your company has and the reputation it fosters with the people and institutions in the communities where you farm the land and do business. For agriculture, S translates into areas such as employee well-being and working conditions, livestock health and welfare, as well as local anchoring and interaction with the local community.
G, governance, is the internal system of practices, controls, and procedures your company adopts in order to govern itself, make effective decisions, comply with law, and meet the needs of external stakeholders. Working actively with company strategy, a thorough risk management scheme, and third-party certifications, like Global GAP, are ways of establishing good governance of your company.
Large food companies (e.g. Orkla, Nestlé, and Unilever) are already requesting more transparency to ensure sustainable farming methods from their suppliers.
Identifying areas of improvement can lead to e.g. lower energy consumption amd reduced pesticide use.
Boost employee motivation. Attract talent through greater social credibility.
Investment and asset optimisation
Enhance investment return by better allocating capital for the long term (e.g., more sustainable buildings, equipment, and processes on farm property). Ensure your farm’s market value. Avoid investments that may not pay off because of longer-term ESG issues.
Access to regulatory incentives
Documenting responsible conduct and sustainable development can provide access to EU subsidies and/or government support.