The global food industry represents one-third of human-caused greenhouse gas (GHG) emissions. To prevent catastrophic climate change, almost 200 countries and states have committed to massively reduce GHGs. These international commitments are placing the food industry under increasing pressure to adopt low-carbon approaches to business.
Many businesses see this as a threat and an added cost, leading to defensive postures and few meaningful strategies says Martin Gooch, CEO, Value Chain Management International (VCMI).
A newly released paper – How can farmers profit from decarbonizing the food industry -- takes a positive approach, positioning the adoption of low-carbon strategies as a commercial opportunity, and describing the best ways for businesses to successfully adapt and profit from environmental initiatives.
Key take-aways are:
- The ability to adapt to environmental and market-driven change is an increasingly important determinant of sustainable competitive advantage.
- Corporations are causing changes to occur, though they are not the primary enabler indecarbonizing the food system. The primary enabler is farmers.
- Corporations need to set, then attain aggressive sustainability targets to drive significantchanges in buyer/supplier interactions. The question then is how “preferred suppliers” are defined.
- The adoption of value chain management (VCM) practices provides unique forms of agility, robustness and nimbleness, resulting in resilient low-carbon food systems. The primary factor in decarbonizing the food system is farmers’ and downstream businesses’ willingness and commitment to collaborate and innovate; it is not technology.
- A “dash for cash” could place farmers at a considerable disadvantage compared to farmers who take a strategic approach in how they monetize low-carbon initiatives.
The gold standard for monetizing low-carbon initiatives is trust-based reporting andverification, tied to continual improvement programs. This relies on businesses sharingstrong strategically- and operationally-aligned relationships.
- The success of low-carbon initiatives is dependent on the adoption of mindsets and practices that reflect a regenerative, not extractive, attitude to resource use. The adoption of low- carbon strategies offers farmers the opportunity to transition from asource of carbon emissions to a means of sequestering carbon.
Link to the report here: https://bit.ly/3qNjfj0
Source: Value Chain Management International September 14, 2022 report release