Sustainability Assessments Likely to Increase

Published on: 14:17PM Jul 25, 2014

The next few decades promise to be an incredible time of volatility, opportunity and risk.  For food companies and retailers, the key to minimizing the negatives, capturing new markets and keeping projected cost increases lower than competitors is in having a deep understanding and better risk management of their supply chain.  This includes the ability to find and create new shared value streams with the most resilient, productive and sustainable agricultural producers.  A critical enabler of this competitive advantage pathway is the collection of data.  For more on the often misunderstood drivers behind sustainability assessments in the food and ag supply chain, see my December 2011 post here.

Further evidence of how important the role of data collection and analysis is becoming in the food and agricultural space (among many others) is in a new survey out this week of what high level corporate executives have on their "top of mind" for the next year.  Three main themes emerged:

1.  Supply chain management is becoming more complex. Consumer goods and retail executives ranked this as their number one challenge – and the one most likely to receive increased funding this year.

2.  There is a big shift in executive attention toward the need for data and the impact data analysis has in helping understand and secure supply chains. 

3.  Sustainability and Corporate Social Responsibility (CSR) issues are increasingly driving decisions.
Notable findings from the survey include:

-- 56% of consumer goods and retail business leaders cited data analytics as being important to their firm’s strategy, making it the highest-ranked strategic area in the survey

-- 44% of business leaders cited traceability and transparency around end-to-end value chains as a top goal for their company just ahead of reducing waste and emissions (42%) and sustainable sourcing (41%)

-- 52% of respondents reported that they have a strong or good capability to meet their sustainability agenda. Reputation and brand (41%), consumer demand (34%) and competition (28%) were cited as three main drivers behind sustainability

-- 56% said health, corporate social responsibility and sustainability priorities are very important to their business

-- 42% placed supply chain management at the top of their list for increased investment over the next 12 months

You can read more about the full survey at The Retail Times  

The take-away from this survey for farmers is that the folks that ultimately buy the commodities you grow are increasingly feeling the need to invest in gathering more information to inform decisions about their supply chain, focus on sustainability priorities and create more transparency.  The only way to do these things is through gathering data from the ground up, which means the push toward sustainability assessments or audits is only going to increase. 

I speak often to farmers, agricultural associations and food companies on the topic of how important it is to capture data and to make sure it is working for them first, before reporting it on to the larger supply chain.  Taking a more systematic approach toward layering a wider array of data (like sustainability and financial) into long-term business planning processes can help individual farm operations and food companies to make better decisions and reduce long term costs the same way it is helping large corporations.  It will also get these entites ready for the sustainability reporting onslaught that is coming their way.

The decision before the agricultural industry is increasingly becoming how and who will provide data about their growing performance, not if data will be collected.  I am excited to be working with folks that are interested in charting their own course on this important fronteer.

  Follow Sara on Twitter: @SustainAg