Cookie settings

Cookies are small text files stored on your device to identify you and can be used to remember user preferences and analyse traffic to further improve our website. We may share information about your use of our site with our social media, advertising and analytics partners. By clicking "Accept all cookies", you agree to the use of all cookies as described in our cookie statement or "Accept only essential cookies" to only use cookies that are necessary for the functioning of our site.

Read our cookie statement here.

You can choose to adjust your preferences at any time.

Wholesale Banking

On the front lines: How agriculture is fighting back against climate change

When farmers choose to approach farming sustainably, it is often a business decision. They are listening to consumers, whose demand for sustainably produced and environmentally friendly foods may not be growing, but it is stable: four out of five consumers in the EU say that environmental issues around agriculture and the production of sustainable and healthy food are key priorities (1).

Consumer preferences are obviously an important part of agriculture’s sustainability business case, but they are not the only reason why it makes sense. Here, we look at the lengths to which some food producers are going to satisfy – and exceed – customer expectations, and find out about the other benefits of pursuing a sustainable approach.

Business boost

“The majority of the companies in the food sector are interested in sustainability. And they must be, because if they're not sustainable, they're not going to survive in the long-term,” says Deborah Perkins, Global Head of Food & Agribusiness at ING. 

Jan Klerken is Founder and CEO of Scelta Mushrooms, which is one of the world’s largest mushroom growers. For Scelta, sustainability has been a highly successful business model: it has helped the company to evolve from a small mushroom grower in the Netherlands to an international business that exports mushrooms all over the world.

“In the beginning, there is more cost involved, and it takes time to implement these changes,” he says. “But at the end of the day, [sustainability is] more resilient. Cheap is not always best, so instead of asking how I could save money, I asked how I could spend money to make my products more attractive.”

Scelta aims to become “100% clean”, and one way it is doing that is by embedding circular-economy principles in the different parts of the agricultural supply chain. and has focused on reducing waste by using discarded stems to produce mushroom concentrate, selling casing soil ingredients to the cosmetics industry, and re-using substrate as an animal feed ingredient.

Healthy cows, happy consumers

More than a fifth of global greenhouse gas emissions are generated by agriculture (2), and if unchecked these will continue to increase as the world’s population grows to nine billion by the middle of the century (3). Over half of the sector’s greenhouse gas emissions are created by animal husbandry (4), and companies are now exploring ways to mitigate that.

European dairy cooperative Arla Foods aims to reduce its carbon emissions by 30% by 2030 and to be carbon-neutral across the value chain by 2050 (5). In 2019, the company launched its Climate Check programme, which aims to triple the speed of CO2 reduction while creating one of the world’s largest sets of climate data from dairy farming (6). Arla’s 9,700 farmers in seven countries input a range of information – from herd size through feed consumption and energy usage – to build up a database of their carbon footprint and feed back on where best to lower emissions (7).

“It’s a very valuable tool for us and our farmers,” says Hanne Søndergaard, Arla’s Executive VP of Sustainability and CMO. “It's enabling us to take action where it makes a difference.”

The company’s moves towards carbon neutrality also involve genetics innovation and breeding to make sure that herds produce lower emissions per litre of milk; create better circularity in the use of slurry, biogas and residual nutrients; and, perhaps most importantly, ensure excellent animal welfare.

“Healthy cows are much better for the environment,” says Søndergaard. “Because when you have a healthy herd, you have good production from one cow and that also helps the CO2 equivalent per litre of milk you produce.”

Søndergaard argues that while the costs of investing in new innovative production techniques or equipment to lower emissions on farm level can be considerable, over the longer term it will help to create a more sustainable business that moves with evolving consumer demand. “It’s very important for us to have our consumers with us on this journey of sustainability, as we are, relatively speaking, a low-margin business compared to many other industries,” she says. “Some of the products we create we can commercialise immediately, but we also have to make some choices based on our belief of what will make Arla a stronger business in the long run.”

Grow more, pollute less

Consumer preferences, however, are not the only reason for food producers to pursue sustainability. Agriculture is a sector that is uniquely affected by climate change and the challenges of sustainability – while also being a significant contributor to both. It is farmers, after all, who are directly feeling the effects of climate change: drought, flooding, insect and disease infestations, and shifting seasons.

“The hard work involved in sustainability is embedded in long-term initiatives such as turning to other means of crop production and transportation. But also in smaller steps such as reducing the amount of water used for crop production,” says Dan Lamprecht, Managing Director at ING.

“Producers are the ones really at the front of all this in terms of climate change, in terms of market pressure,” says Josiah McClellan, Corporate Sustainability Leader at Corteva Agriscience. “If you want to make sustainability work for farmers, it has got to be producer-focused.”

By 2030, Corteva aims to have trained 25 million farmers to strengthen sustainability in such areas as soil health, water use and pest management, and to use technology and data to do this. The programme’s emphasis is on knowledge and technology transfer that builds financial and environmental resilience.

Corteva is also working with farmers to reduce greenhouse gas emissions from cropping systems by 20% while increasing yield by 20%. This effort includes a project with the International Rice Research Institute that has enabled farmers to grow rice without the traditional flooded paddy and transplant approach, reducing water use and methane emissions while raising yield.

Corteva’s partnership approach demonstrates the importance of collaboration in pursuit of a goal: improving the sustainability of agriculture. “We only have 10 years to achieve these targets,” says McClellan. “And it’s going to take a lot of creativity and collaboration.”