Delivering sustainable solutions in a more competitive world Sustainable development: Responsibilities and initiatives of agribusiness companies June 7th, 2011 Marianne Fernagut Environmental Resources Management (ERM)
Oct 19, 2014
Delivering sustainable solutions in a more competitive world
Sustainable development:
Responsibilities and initiatives of agribusiness companies
June 7th, 2011
Marianne FernagutEnvironmental Resources Management (ERM)
Delivering sustainable solutions in a more competitive world
Sustainability
“… being a bit like world peace –a very large concept and even if we never quite get there; it's the bestpath to take.”
» Bob Carsson, Vion Food UK
Delivering sustainable solutions in a more competitive world
Overview
Sustainability
Communicate
Measure
Case studies
Food and drink industry
Sustainability reporting
Reduce
Delivering sustainable solutions in a more competitive world
Sustainability in food and drink sector
EnvironmentSocial
Economic
Transport and
distribution
Packaging and
waste
management
Fair trade
Human
Health
Food security
Supply chain
management
Net Sales Investments
Financial
Capital
Climate change/
carbon footprint
Resource
efficiency
Energy
efficiency
Water use and
management
Consumers
Employment
Figure 1: Key
sustainability
issues in the food
and drink sector
Delivering sustainable solutions in a more competitive world
Drivers for sustainability… Avoid Risks
• Financial risks
Physical impacts of Climate Change
Carbon = $$$ (EU-ETS, other cap & trade systems)
Increasing energy costs
• Regulatory risks
State and regional policies
• Competitive & reputational risks
Pressure from stakeholders (investors, insurers, customers, employees, media, advocacy groups)
Image
Technology
Delivering sustainable solutions in a more competitive world
Some examples of water risks
Delivering sustainable solutions in a more competitive world
Drivers for sustainability… Opportunities
Direct sales profits (changing consumer behaviour, new markets,…)
Reducing costs (energy, carbon emission permits)
Avoiding penalties from non-compliance
Improved reputation (greener image)
Attracting stakeholders (investors, customers,…)
Ahead of the game – prepared for future regulations
Delivering sustainable solutions in a more competitive world
Tracking Sustainability
• Measures the performance of companies that meetglobally recognised CR standards and facilitates investment
• Tracks financial performance of the leading
sustainability-driven companies worldwide
• Integrating sustainability into capital markets
for the health of the planet and its people
• Carbon Efficient Index addresses the
investment community’s increasing concern
with environmental issues
• Identifies the best managed companies that
will succeed on a sustainable basis
Delivering sustainable solutions in a more competitive world
Also governments care….
• Food and drink (EU-25) cause 20 to 30% of environmental impact of total(private) consumption
Environmental impacts of products (consumption)
32%
24%15%
29%
Housing
Food and beverage
consumption
Transport
Other
Environmental impacts of products (consumption)
Delivering sustainable solutions in a more competitive world
How to measure (and reduce) the environmentalimpact?
Delivering sustainable solutions in a more competitive world
Where to start: what to assess?
Corporate Assessments
Product Assessments
A single product across its life cycle
The entire value chain acrossall product categories and
company activities
Primarily for investors, stakeholders,NGOs and media
Primarily for customers and consumers
Used at corporate level
Used for R&D, marketing and customer-facing initiatives
Used to managesustainability
performance across thewhole company, engagepartners and publically
report
Used to differentiate/ label the product, manageperformance for that given product, and assist supply
chain engagement
Delivering sustainable solutions in a more competitive world
RetailTransport Production DistributionStorage& Retail Transport
Storage &Consumption Disposal
From Cradle
• Assessment of the environmental effects a product or service has duringits lifetime
• Some footprints look at only one impact such as carbon or water
Life Cycle Assessment (LCA)
RawMaterials
To GraveTo Shelf To ForkTo Gate
Delivering sustainable solutions in a more competitive world
Example Carbon Footprint – 500g Pack of Mince
• Total footprint = 7.3kgCO2 equivalents
Production and transport of raw materials
Processing and packaging
Retail and use
End of life
22%
68%
10%
0.2%
Delivering sustainable solutions in a more competitive world
Organic Tomatoes (Locally consumed, Australia)
Consumption
Packaging
Delivering sustainable solutions in a more competitive world
Example Carbon Footprint of Cut Flowers
• Kenya
Total footprint =3.7kg CO2
equivalents
0.7%
0.6%98.7%
Production andpackaging
Transport
Retail
Estimate of impacts of transportto consumer taken fromDefra Shopping Trolleystudy – 0.06kg CO2 eq /kg
Current disposal statistics(plastics) taken from Defra
24%
72%
4%End of life
Carbon footprint of Cut Flowers
18,9
3,7
0
10
20
Holland Kenya
CO
2e
q
• HollandTotalfootprint =18.9kg CO2equivalents
Delivering sustainable solutions in a more competitive world
• Tesco Whole Chicken
4.3 kg CO2e per kg 6.9 kg CO2e per product
• Tesco Free Range Whole Chicken
4.9 kg CO2e per kg 12.4 kg CO2e per product
• Tesco Organic Whole Chicken
5.4 kg CO2e per kg 13.6 kg CO2e per product
Free Range and, particularly, Organic products have a significantly highercarbon footprint per kg of product
Example of Carbon Footprint - Chicken
Delivering sustainable solutions in a more competitive world
• Tesco Whole Chicken
24 litres per kg 39 litres per product
• Tesco Free Range Whole Chicken
25 litres per kg 62 litres per product
(+4% per kg for water footprint; +15% for carbon footprint)
• Tesco Organic Whole Chicken
25 litres per kg 64 litres per product
(+6% per kg for water footprint; +26% for carbon footprint)
Example of Water Footprint - Chicken
Delivering sustainable solutions in a more competitive world
LCA or footprint is used
• Clear method to analyse the environmental related impacts productsthroughout their life cycle
• “Needs to measure it to manage it”
• Help to identify the most important phases of the life cycle forimprovement/ efficiencies
• Supports sustainable product design
• To disclose and report (credible) information
• Inform policies
• Validation of claims
Delivering sustainable solutions in a more competitive world
Challenges…
• Emerging and available accounting methods (ISO, PAS 2050, WRI/GHGProtocol
• Understanding your processes and boundaries is not always easy
• Data collection and availability
• Resource issues
• None quantifiable aspects of sustainability
Delivering sustainable solutions in a more competitive world
Case studies
Integration of environmental sustainability intodecision-making in agro-food industry
Delivering sustainable solutions in a more competitive world
Case Study: Cadbury water footprint
Description
• Develop a pilot tool and method tocalculate a cradle to gate footprint forEndearmints (product water footprint).
• Part of a programme to further theircorporate responsibility.
Results
• Over 70% of the footprint is from sugarand glucose.
• 13% is from the manufacturing (directcontrol).
• Old site with many areas whereefficiencies can be made.
Next steps
Explore how current water conservationmethods influence the footprint.
Further ecosystems work related to sugar.
Delivering sustainable solutions in a more competitive world
Case study: Tesco Corporate and Supply Chain WaterFootprint
Description
Completed a direct and indirect waterfootprint of the entire supply chain.
Results
Direct water footprint was 23 billion litres,nearly all of which came from meteredconsumption in stores. This represents just1% of the total water footprint associatedwith the products Tesco sell.
Some 850 billion litres comes from theirupstream supply chain, and 1,000 billionlitres used by customers consuming theirproducts.
Next steps
Tesco is using these figures to develop awater strategy over the next year.
Delivering sustainable solutions in a more competitive world
Case Study: Carbon footprint of agriculture
Description
• Government commissioned study tocalculate carbon footprint of the Flemishagricultural sector (beef, pork, milk)
Results
• Under progress
Next steps
Gain insight in the production process ofbeef, pork, milk.Explore what the hotspots are.
Delivering sustainable solutions in a more competitive world
How to communicate the environmental impact of aproduct?
Delivering sustainable solutions in a more competitive world
The First Three Carbon Labels (UK, 2006)
Who? What? Where?
Cheese &Onion Crisps
Botanics &IngredientsShampoo
Mango & Passion-fruit Smoothie
On pack
Point-of-sale
Website
Delivering sustainable solutions in a more competitive world
Today – 5,000 products, 90 brands
Carbon Trust labels on products in the US, Canada, Ireland, UK, Denmark,Germany, France, Norway, Sweden, Belgium, The Netherlands, Austria,Switzerland, Spain, Italy, Russia and New Zealand.
Delivering sustainable solutions in a more competitive world
Worldwide Environmental Labels /Certifications arise
• Carbon Trust/PAS 2050 (UK)
• Grenelle II law - BP X30-323 (France)
• KRAV - certification for food (Sweden)
• Migros Labelling Scheme/ Climatop (Switzerland)
• CertifiedCarbonFree label (US)
• Carbon Concious label (US)
• SGS carbon neutral label (China)
• Carbon Counted label (Canada)
• Raisio label (Finland)
• Carbon Trust Australia
• ….
Delivering sustainable solutions in a more competitive world
Other Disclosure and Reporting tools and efforts
• Carbon Disclosure Project (supply chain, water…)
Information disclosure to investors, public sector..
• Global Reporting Initiative (GRI)
Sustainability and Integrated reporting
Delivering sustainable solutions in a more competitive world
Harmonisation initiatives in the food and drink sector:
European Commission/ Joint Research Centre: Environmental Footprinting project(product/organisation) methodologies and guidance
European Food Sustainable Consumption and Production (SCP) Round Table
European Retail Roundtable for Sustainability
International Dairy Federation – Carbon Footprint guidance
Delivering sustainable solutions in a more competitive world
Sustainability
“… being a bit like world peace –a very large concept and even if we never quite get there; it's the bestpath to take.”
» Bob Carsson, Vion Food UK