Insights on Sustainable Agricultural Supply Chains (Q&A)

December 22, 2021 5 minute read

Insights on Sustainable Agricultural Supply Chains (Q&A)

In this age of climate crisis and pandemic-related supply chain shortages, there is growing support for regenerative agriculture and investments in resilient supply chains. But the transition to a sustainable global food system will demand all hands on deck. 

Multinational agribusinesses have made strides toward advancing more sustainable and ethical global agricultural supply chains. But progress is still a moving target. Companies must prioritize strategic collaboration–across industry, with cross-sector players, and with local partners–to overcome obstacles to sustainable impact and achieve lasting, meaningful results.

Q&A with Ceejay Girard, Senior Manager

We sat down with Resonance Senior Manager Ceejay Girard to learn more about how our Impact Advisory team is working with leading companies to partner within their industry and with their farmers to build stronger, more sustainable agricultural supply chains. Below, we share her top insights.

What are primary supply chain sustainability challenges for today’s multinational agribusiness companies?

1. Scope 3 emissions reduction is a huge challenge.

Most large companies have been reducing greenhouse gas (GHG) emissions related to their direct assets and factories. But now, they’re making commitments for indirect Scope 3 emissions generated through their supply chains, too. Managing the data and scale required to develop a GHG baseline and show meaningful reductions through regenerative agriculture and on-farm improvements is an incredible challenge facing the industry. Collaboration and industry alignment will be critical for understanding which practices are driving sustainable impact–and then comes the challenge of how to finance, measure, certify, and report on them.

2. Transparency and traceability.

The second challenge feeds into the first. Consumers are broadening their understanding of sustainability beyond popular topics, such as deforestation and human rights, to include GHG emissions, migrant labor complexities, water use, and biodiversity.

While many companies have invested in understanding this level of detail for commodities and ingredients that have been deemed particularly problematic, they will now need to invest across their supply chains. In the long term, full supply chain traceability and transparency will allow companies and consumers to learn more about the risks and rewards of investments in certain commodities. But it can still be hard for companies to balance the business case for traceability and transparency in the short term, because of added costs, possible reputational downsides, and data protection issues.  

3. New data.

Also, as a result of Scope 3 and traceability initiatives, companies are gaining access to a whole host of new data. This is opening up conversations about data protection and pre-competitive collaboration: Should companies use open-source platforms or proprietary systems to mine farm-level data? This is an important debate that will impact a lot of our partners over the next five years.

In your role at Resonance, how do you help multinational companies address supply chain sustainability challenges and amplify sustainable impact? 

I help companies develop and refine partnership strategies so that they can move from establishing sustainability targets to cross-sector convenings to collaboration with diverse and critical stakeholders for action. That’s what’s needed to address complex sustainability issues at a landscape level. To support our clients, we assess which landscapes carry the highest risk of undermining business goals. These landscapes usually have limited infrastructure, higher numbers of smallholder farmers, and a lower level of transparency.

To solve sustainability challenges in these contexts, it’s crucial to bring all key stakeholders–including farmers and local community groups–to the table, instead of just having the company make decisions and assume sole responsibility for achieving the outcomes needed. 

In a field saturated with partnership conveners, I think it’s also important to note that Resonance doesn’t just develop partnerships–we look at the mechanisms each partnership can deploy to achieve sustainable impact. We help companies build incentive programs that facilitate much-needed behavior change. We map funding partners and build the financing vehicles that deliver change. We design the service delivery programs to help farmers improve on-farm practices. We also implement and measure the outcomes of the interventions we design.

What factors are most critical when companies look to advance agricultural supply chain sustainability initiatives?

First: Your level of investment shapes what you’re able to accomplish and shapes the way we’d design a program. And this is why you also need to have a thorough understanding of your project’s business case. If you’re launching pilots without looking forward into the future, then you might not collect the data you’d need to establish a clear baseline and demonstrate a return on investment. This limits your ability to scale as well as your ability to learn effectively and share those learnings within the industry.

Second, with respect to convening stakeholders and building partnerships: Everyone needs to be represented, but what is each organization’s role? Assigning clear roles and responsibilities at the onset of a collaboration goes such a long way. Don’t just invite people to table; be really clear about what you need people to do, especially for landscape-level change. Role ambiguity can collapse an entire project and waste precious resources needed for execution.

What does it mean to implement farmer-centric solutions? How does this work in agricultural supply chains, and why does it matter?

This question gets to the participatory angle of global sustainable agriculture. Companies need to involve their growers. This usually happens in one of two ways: 

  • In the first, you involve growers to understand the challenges they are facing on the farm. 
  • In the second instance, you want to know what adoption barriers exist and what it’s going to take for farmers to change their practices. 

Soliciting feedback is a very different process from gaining buy-in. For that second case, it’s not just about understanding what it would take for farmers to change their practices, but about knowing what type of support would help: subsidies, de-risking, cost-sharing, or training? Like our client, Margaret Henry from PepsiCo describes, it’s a three-legged stool: If you’re engaging with farmers, you need to understand the environmental, economic, and social constraints that they’re dealing with. Everyone knows you need to familiarize yourself with the local context, but it’s important to understand what about that context could keep you from achieving results from your investment.

What sustainable agricultural supply chain models and solutions are you most excited about?

1. Blockchain

I’m excited about blockchain. It’s a technology that has the ability to provide companies with farmer-level transparency and traceability. It also provides a ledger that growers can use to unlock financial incentives and get better prices for their crops, instead of being at the mercy of informal contracts. There’s a really great free program through Anheuser-Busch InBev in Zambia in which growers can use blockchain to find other buyers for rotation crops or better deals, or establish credibility with financial institutions to access carbon credits and better contractual terms.

2. Advocacy and innovation from cross-sector commodity groups

I’m also tracking the rise of cross-sector commodity groups that are innovating, driving action on the ground, and defining new standards for the entire industry. For example, the Sustainable Rice Platform is innovating farming practices for one of the most important food crops in the world, alongside researchers, governments, funders, and more. I also like this example because it’s a platform that’s expanding from emerging markets like Thailand, China, and India into the US (instead of the other way around). 

3. Alignment between climate change adaptation and mitigation

There’s also increasing alignment between climate change adaptation and mitigation across every level of agricultural supply chains. The way some leading companies are now building business cases for sustainability investments based on a better understanding of the cost of climate risk is really exciting.

It’s a broader lens that includes a far wider range of variables: Instead of just factoring in the efficiency of a factory’s water usage, these newer analyses account for the entire watershed and all known variables and impacts. It’s great to see how setting goals around Scope 3 emissions has influenced the way companies are assessing risk and investing in climate resilience throughout their entire supply chain.

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If you are a corporate leader and would like to be a part of a discussion about these and other issues in the presidential transition, contact Resonance Strategic Partnerships Manager, Seth Olson.