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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)
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Sustainability in agroindustry

Oct 19, 2014

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Page 1: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

Sustainable development:

Responsibilities and initiatives of agribusiness companies

June 7th, 2011

Marianne FernagutEnvironmental Resources Management (ERM)

Page 2: Sustainability in agroindustry

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

Page 3: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

Overview

Sustainability

Communicate

Measure

Case studies

Food and drink industry

Sustainability reporting

Reduce

Page 4: Sustainability in agroindustry

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

Page 5: Sustainability in agroindustry

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

Page 6: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

Some examples of water risks

Page 7: Sustainability in agroindustry

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

Page 8: Sustainability in agroindustry

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

Page 9: Sustainability in agroindustry

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)

Page 10: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

How to measure (and reduce) the environmentalimpact?

Page 11: Sustainability in agroindustry

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

Page 12: Sustainability in agroindustry

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

Page 13: Sustainability in agroindustry

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%

Page 14: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

Organic Tomatoes (Locally consumed, Australia)

Consumption

Packaging

Page 15: Sustainability in agroindustry

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

Page 16: Sustainability in agroindustry

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

Page 17: Sustainability in agroindustry

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

Page 18: Sustainability in agroindustry

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

Page 19: Sustainability in agroindustry

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

Page 20: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

Case studies

Integration of environmental sustainability intodecision-making in agro-food industry

Page 21: Sustainability in agroindustry

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.

Page 22: Sustainability in agroindustry

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.

Page 23: Sustainability in agroindustry

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.

Page 24: Sustainability in agroindustry

Delivering sustainable solutions in a more competitive world

How to communicate the environmental impact of aproduct?

Page 25: Sustainability in agroindustry

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

Page 26: Sustainability in agroindustry

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.

Page 27: Sustainability in agroindustry

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

• ….

Page 28: Sustainability in agroindustry

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

Page 29: Sustainability in agroindustry

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

Page 30: Sustainability in agroindustry

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