A Framework for Sustainability Innovation in Agri-Business
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A framework for sustainability innovation in agri-business The corporate implementation of the Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI) and the United Nations Sustainable Development Goals (SDGs) A framework for sustainability 2 innovation in agri-business Content Authors Foreword 3 Earth Security Group are strategic advisors helping companies, investors Executive Summary 4 and governments to engage with sustainability issues that are shaping 1 Introduction 6 their markets, aligning business growth Sustainability drivers of with sustainable development goals. agri-business innovation [email protected] 2 The Framework 8 earthsecuritygroup.com The 10 Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI) and the SDGs 3 Recommendations 30 The corporate implementation of CFS-RAI and SDGs Acknowledgements 32 Endnotes 33 Copyright © Earth Security Group 2018 Disclaimer The views and opinions expressed in this report are solely those of Earth Security Group. Note All currency $ refers to US dollars. Strategic Partners Funding Partner A framework for sustainability 3 innovation in agri-business Foreword Investing in agriculture is widely The formation of the Global Agri- recognised as one of the most effective business Alliance (GAA), a CEO-led ways to alleviate poverty, improve platform to collaborate on the sector’s food security and reduce hunger global challenges and opportunities and malnutrition. Paradoxically, both for sustainable development impact, overseas development aid and domestic and the context of the World Business investment in agriculture have been Council for Sustainable Development declining since the 1990s. The total share (WBCSD)’s broader work facilitating the of aid to agriculture from the OECD has business collaborations on food systems, fallen from nearly 20% in the mid 1980s represent opportunities to achieve and to a mere 7% in 2015 and has remained operationalise greater strategic thinking at this level since. in how global business will advance solutions and responsible investments There is now a growing recognition of the that respond to critical social and value of the private sector’s contribution environmental pressures. to sustainable development in agriculture, not merely from the financial Earth Security Group is providing a contribution that the sector can make, strategic framework for agri-businesses but for the scale, longevity and impact, to invest in areas of sustainable growth, technical and market access that can backed by a series of innovative business only be brought by the private sector. models and cross-sector cooperation opportunities. Their translation of the The UN Sustainable Development Principles for Responsible Investment Goals (SDGs) have specific targets for in Agriculture and Food Systems (CFS- the private sector. According to the RAI) and SDG targets into a business ‘Better Business, Better World’ report implementation framework will help of 2017, achieving the SDGs creates at the sector’s continuous improvement least US$12 trillion in opportunities, in impact measurement and strategic with many returns to be generated in cross-sector collaboration. the agricultural sectors. The report estimates that low-income food markets We are pleased to have collaborated with could generate between US$155–265 Earth Security Group. We intend that this billion per annum and at the same time report will serve as a guide for investors improve the nutritional benefits of food and agri-business companies to plan for 800 million people under nourished for targeted, inclusive and sustainable and malnourished. investments that ensure optimal returns in agricultural value chains and At the same time, global agricultural prosperity for all farmers. companies are confronting a more complex set of systemic social and Sunny Verghese environmental pressures around the Co-Founder and Group CEO, world. Seizing opportunities to make Olam International Ltd; more responsible investments at scale Chair, World Business Council and materialising the benefits will for Sustainable Development require strategic industry cooperation at various levels and with different stakeholder groups. A framework for sustainability 4 innovation in agri-business Executive Summary Fully realising the potential of agri-businesses In this report, Earth Security Group provides in food and non-food crops to become stewards agri-businesses with a practical framework to of natural resources and vibrant farming implement the 10 Principles for Responsible communities is essential to companies’ long- Investment in Agriculture and Food Systems term value. Their customers and investors are (CFS-RAI) and the UN Sustainable Develop- increasing their scrutiny of the impact that agri- ment Goals (SDGs) as a means to align their businesses have on natural capital — such as growth strategies with a universal impact deforestation and biodiversity loss — and social framework for sustainable agriculture. issues, such as human rights and decent work, land tenure security and gender empowerment. Overall, the social, environmental and govern- ance issues that companies must think about and respond to have continued to grow in recent years. Recommendations for agri-businesses 1 2 3 Adopt CFS-RAI and SDG targets Use CFS-RAI and SDG targets as a basis Draw on CFS-RAI and SDG targets to as a strategic framework to guide for impact measures to monitor and develop holistic strategies to advance corporate strategy communicate corporate progress smallholder development The scope of sustainability issues that Promoting continual improvement is Improving the livelihoods of smallholder are directly material to the operations of key for agri-businesses to successfully farmers is one of the biggest imperatives agri-businesses is very wide. Companies integrate sustainability drivers into for the sustainable growth of the sector. must assure their stakeholders that their core business. In order to do this, A holistic local development framework their business priorities are aligned it is necessary for companies to build a is needed, addressing a range of issues with a holistic approach to sustainable framework that allows them to measure – from helping farmers to increase their agriculture, rather than isolated issues and benchmark their progress on a wide incomes and productivity, to facilitating or initiatives that companies may feel scope of issues. In selecting areas for extension services that improve education, compelled to work on at any given point in impact measurement, companies must skills and access to markets. time. balance the issues they see as aligned with corporate values, and those that The models and partnerships identified The legitimacy of the CFS-RAI as a are aligned with the expectations of their in this report show that agri-businesses consensus-driven, comprehensive stakeholders. The CFS-RAI and SDG are most effective at supporting framework for sustainable agriculture targets provide agri-business companies smallholders when they collaborate with and food systems is born out of an with the external framework to ensure other stakeholders, such as civil society, alignment of interests between business, their performance is aligned with all the financial institutions and governments. governments and civil society. Companies aspects of this complex agenda. should consider making the CFS-RAI By covering a wide range of development an integral part of their global vision, In order to help companies to define aspects, the CFS-RAI principles provide mission and strategy using it as a broad a comprehensive and, in the eyes agri-businesses with a useful framework framework to assure stakeholders that of stakeholders, legitimate impact of issues and SDG targets to assess, plan they are focusing on the right issues. framework, we have aligned CFS-RAI with and engage in smallholder development Ultimately, such a framework will help specific SDG targets that are material for initiatives. Using this framework will help companies make explicit how their impact agri-businesses. This framework helps agri-businesses to better engage with priorities and opportunities in the short-, companies that are already seeking to other stakeholders, discuss common medium- and long-term align with the impact the SDGs to go one step further aims and interests, and monitor and universal principles and aspirations of the in their implementation and definition of communicate their impact. sustainable agriculture agenda. impact objectives and metrics. A framework for sustainability 5 innovation in agri-business 4 5 Use CFS-RAI and SDG targets to deepen Use CFS-RAI and SDG targets to define — The empowerment of young people in the collaboration of agri-businesses priority areas of collaboration of agri- farming areas and the promotion of with governments and multilateral businesses on systemic issues youth entrepreneurship, to ensure the development agencies inter-generational development of the Through platforms such as the Global industry (Principle 4); Responsible agri-businesses depend on Agri-business Alliance (GAA), the governments providing a level playing field World Business Council for Sustainable — The promotion of community land rights to maintain their competitiveness. They Development (WBCSD) and other and the contribution of companies must ensure that every other company corporate networks, agri-businesses are to helping smallholder farmers gain operating in the same landscape is