Take Credit for Sustainability with ESG Reporting

01:30PM Apr 20, 2020
Here’s why you need to track environmental, social and governance outcomes.
( AgWeb )

Building trust in food begins with empowering farmers through one of the largest and most diverse conservation- and sustainability-focused public-private partnerships in our nation’s history: America’s Conservation Ag Movement. To find the latest news and resources related to the Movement, visit AgWeb.com/ACAM.

Here’s why you need to track environmental, social and governance outcomes 

Just talking the talk about sustainability on your farm may not pass the test in the future. Instead, you must prove the practices on your farm align with environmental, social and governance (ESG) standards. 

Why is this trend picking up speed? Kenny Fahey, interim director for Leading Harvest, an organization focused on providing standards for sustainable agriculture, points to two sources:

  • Nontraditional investors are becoming more involved in financing farms and want ESG reporting included in the management of the asset.
  • The value supply chain continues to have higher degrees of expectations of its raw ingredients to make claims to consumers that products are sustainable.

“Right now, most ESG is not backed by third-party verification,” Fahey says. “But I don’t know how long the non-verified option will last. This is not a subtle trend; it is only accelerating.”

Proof in the Data

ESG reporting is a way to verify how a business integrates various sustainability factors into the operation. For a farm, this could mean documenting conservation practices, air- and water-quality improvements or fertilizer use, says Rod Snyder, president of Field to Market, an alliance of groups partnering to define, measure and advance sustainable food production. 

The social and governance factors could include your labor practices, data security, team diversity or business ethics.  

“Many companies are asking farmers to document this information in a more comprehensive and regular way,” Snyder says. “It is not enough to just say, ‘Trust us.’ The good news is through tracking this type of information, producers may find insights to make their operation more efficient.” 

Look at sustainability reporting as a way to protect your investment and grow for the future, adds Matt Armstrong, sustainability and assurance lead with K·Coe Isom

“Now is not the time to wait and see,” Armstrong says. “The best action is to be proactive, identify what your organization’s environmental impacts and climate risks are, and stay ahead of changes.”

Navigate the ESG Reporting Process

Non-mandated sustainability reporting can be complex and unfamiliar. To start the process, K·Coe Isom’s Matt Armstrong and Field to Market’s Rod Snyder share this advice. 

  1. Contact your grain buyers to see if they are receiving ESG questions from customers. 
  2. Identify the topics most critical to your operation (chemical or fertilizer use, pollinator habitats, etc.). Determine which data/record program you’ll use to generate reports and do analysis.
  3. Establish procedures so you can document the good work you’re doing. That will include identifying all aspects of your business that produce greenhouse gas emissions. Set baselines for measuring changes over time.
  4. Report accurate, reliable information in a meaningful way to your stakeholders, whether they’re customers, landlords or bankers.
  5. Arm yourself with third-party data that allows you to stand behind what you’re reporting.

To find the latest on sustainable food systems and conservation ag, visit AgWeb.com/ACAM