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The following is a commentary written by Kenny Fahey, President and CEO of Leading Harvest, a non-profit organization working to accelerate the transition to a more sustainable and resilient global agricultural system.
Many major food and beverage brands are making significant commitments to sustainable and regenerative agriculture. In recent years, these brands have invested millions of dollars to promote their commitments to transitioning to sustainable farming practices, eliminating emissions, and reducing water use.
Consumers and investors are listening. Products marketing sustainability have grown by more than 30% in the past five years. The five-year compound annual growth rate for this category is nearly double that of conventionally sold products. And there has been a surge in capital allocated to companies with strong sustainability performance. In 2020 alone, assets managed for sustainable assets increased by 96% compared to 2019.
But these big promises do not translate into sufficient progress. According to a 2022 Accenture report, only 7% of companies are on track to achieve net zero targets for Scope 1 and 2 emissions. According to Bain, only 3% of executives at large companies globally say they are on track to meet their sustainability goals. Of all the companies that have pledged to convert millions of acres of land to sustainable, organic or regenerative agriculture, few have reported any real progress.
As our attention jumps from one presentation to the next, we end up focusing on the wrong things. Flashy brand announcements distract from the global crisis in which agriculture plays a critical role in solving biodiversity collapse, land degradation, climate change, nutritional deficiencies, and more.
Companies have replaced selling sustainability with actually solving sustainability problems. The private sector needs a new model for sustainability, one that shifts the focus from selling to execution.
Here are three ways you can change your approach:
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Flip the script on sustainability initiatives.
Brands today are competing to see who has the latest strategy, the greatest commitment, and the newest brand.
This works from a marketing perspective. Audiences remember spectacular presentations. But what if instead agricultural supply chains competed to achieve the best results? Rather than pushing for the next biggest commitment, companies will be encouraged to adopt actionable frameworks to accelerate real farm-level change. The press release will report progress, not make a 20-year promise, whether or not it is achievable.
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Standardize your measures of success.
With the current model, companies each use their own metrics to define their sustainability performance. We're all working toward the same goals, but our companies define success differently. This means there is no ability to compare one result to the next.
To make meaningful progress, we need a common language for sustainability. A metric or standard that comprehensively measures success across the range of sustainable outcomes demanded by consumers, investors and other stakeholders. Otherwise, we end up duplicating efforts across the industry, wasting time, energy and money reinventing the wheel with new initiatives and pulling farmers in multiple directions.
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Please show me your receipt.
Transforming agricultural supply chains requires third-party verification. This is non-negotiable.
A deep-rooted lack of trust is prevalent across the business ecosystem, not only between consumers and brands, but also between levels of the value chain. Third-party audits build trust through verifiable receipts. This allows value to be distributed across the business ecosystem, whether by offering premiums to farmers and ranchers, operating licenses, or preferred terms on contracts.
Ultimately, companies branding themselves with new initiatives will not make any difference to global agriculture. By focusing on the biggest results rather than the most memorable press release, we can unleash the power of free market competition to drive change on a global scale. Agreeing on a common language for measuring success and having third parties audit that success is critical to unlocking the full potential of the private sector.
