As the world approaches its turning points for climate change, biodiversity loss and depletion of natural resources, sustainability is doubly important for food businesses.
The agri-food sector is dependent on increasingly scarce soil, water and temperate climates, which means that margins for sustainability have narrowed, threatening the industry’s bottom line.
But the sustainability of food producers, distributors and retailers also determines their social license to run a business. Food businesses may exist primarily for profit, but they are also responsible for nurturing an ever-growing population, more than half of whom are overweight or obese.
A recent analysis of sustainability strategies, Fixing the Food of Business, unveiled by the world’s 100 largest food companies, lifts the lid on the existential threats that agri-food companies are proactively countering, as well as those that the industry has not yet internalized as sustainability risks and opportunities.
With governments poised to announce national strategies for radically changing food systems at this month’s UN Food Systems Summit, food companies need to recognize and assume their role and responsibilities as a key driver of this transformation.
To ensure that the company’s sustainability strategies have the greatest impact on both people and profits, food companies should ask four critical questions.
1. Do our product portfolios and strategies contribute to healthy and sustainable eating habits?
At present, only one in ten of the largest food companies has set a comprehensive strategic goal in terms of contributing to healthy and sustainable diets. (The report did not specify which company.) As the most authoritative nutrition literature shows, healthy and sustainable diets can reduce the risk of non-communicable diseases such as diabetes and obesity and help extend the life and health of their consumers.
Food companies must recognize and assume their role and responsibilities as an important driver of food transformation.
2. Are our production processes environmentally sustainable, or are they involved in environmental damage such as greenhouse gas emissions, freshwater waste and deforestation?
By definition, overexploitation of the resources needed for your business is unsustainable, but the responsibility for environmental sustainability across food businesses is uneven and inconsistent.
Although more than 90 percent of companies monitor their greenhouse gas emissions, only about one-fifth make it a specific goal to bring them down as part of their sustainability strategies.
And despite the recent high-profile campaigns around the environmental costs of palm oil, only six of the world’s 100 largest companies make a point in registering sustainable procurement.
3. Do our chains upstream and downstream reproduce our values by rejecting children and slavery and protecting the rights of workers, their families and communities?
For food systems to become more inclusive and sustainable, companies must reduce not only their environmental impact, but also the inequalities that mean that millions working in agriculture globally are also among the poorest in the world.
The sustainability of the agri-food sector depends as much on providing decent livelihoods and rights for all in the value chain as on the protection of natural resources, and this includes indigenous and rural communities.
Only 5 percent of the companies surveyed by the initiative published targets for sustainable supply chain management, while none of them provided information on land and water rights protection.
4. Do we fulfill our “social license to produce” by being honest, refraining from fraudulent practices, respecting all stakeholders, and obeying the law?
Strategic goals and objectives of meeting corporate tax obligations and protecting resource rights are typically lacking in sustainability strategies, and this can undermine legitimate democratic institutions and public confidence.
The biggest risk associated with a lack of accountability on issues such as corruption and legality is that this limits governments’ ability to fund and achieve the UN’s sustainable development goals to stop hunger, poverty and climate change.
Food companies alone cannot solve the challenges of the world. And the UN Food Systems Summit is just the start of an acute transition from all sectors and elements of society.
But it is in everyone’s interest, including the food companies themselves, to play their role as fully as possible in contributing to the sustainability of humans and the planet as well as profit.