WIAS 2021 Takeaway: Sustainability and Climate Change
By Michelle Pelletier Marshall, Women in Agribusiness Media (December 7, 2022)
Sustainability and climate change -- the buzzwords of not just the agriculture industry, but of every business near and far. There is a global concern, a global initiative, a global imperative to be better and more conscientious in how we treat the planet, and yet still provide for its ever-increasing inhabitants.
The 10th annual Women in Agribusiness Summit, held September 21-23, 2021 in Minneapolis, addressed this topic via a panel discussion with experts in the sector: Barbara Aguiar, director of global marketing and business development with BASF; Jennifer Nelson, senior director of environmental affairs at Seaboard Foods LLC; Jess Newman, director of ag and sustainability at McCain Foods; and Beth Sauerhauft, sustainability expert with American Farmland Trust.
Below are the takeaways from the conversation, led by Sauerhauft who moderated the panel, which touched upon sustainability goal setting and connection to c-suite mission, collaboration with other companies and government, and the challenges along the way.
1). Do your companies have corporate goals related to climate change? How did you get started with the process?
Barbara, BASF: We have corporate goals at different levels as we are a bigger organization with different divisions. At the highest level, we have the goal to reduce our CO2 emissions by 25 percent by 2030. By 2050, we want to be seen as a company that is net zero emissions of CO2, which we would consider climate neutral. At my division, Agricultural Solutions, we have set our own goals when it comes to climate change. This is to help our customers reduce CO2 emissions by 30 percent by 2030.
Why do we have these goals? Our CEO was really sharp in saying that climate change is the biggest challenge that we have in the 21st century, and how we treat it will be a translation as to how we see Planet Earth, and how respectful we are with future generations.
When it comes to farming, though, we know what climate change means to this industry, and because of the contribution by agriculture to greenhouse emissions, farmers will be at center stage of this transformation. We are here to help them because we have the tools to support this journey of utilizing farming practices that acknowledge climate change and help reduce it.
Jess, McCain Foods: McCain got started on our goals in a similar way. We had a CEO, Max Kuhn, who was very passionate about sustainability. There was a top down push that really resonated with a lot of our employees, where there was kind of grassroots ground swelling of ‘hey, we need a sustainability report, we need goals’. The founders of this 60-year-old privately held family business – the McCain brothers – were known for saying good ethics are good business. And so very quickly, our CEO’s kind of passion made sense in the context of who we are as a company, and that sustainability was a natural extension of that. As far as starting on this journey, we thought about what are those cornerstones of who you are as a company already? And how does this fit into that?
McCain publicly set its sustainability goals in 2019. We have four areas of sustainability focus. The first is resource efficient operations, which deals with everything having to do with manufacturing and our footprint. That's where most of our scope one and two emissions are. The second pillar would be smart and sustainable farming. This is where most of our scope three emissions are in our value chain – how we interact with our potato farmers – but also some of our scope one and two where we own farm ground. The other two pillars are around good food, so nutrition and transparency, and thriving communities and how we interact with the communities in and around our plants.
Our specific commitments related to resource efficient operations are a 50 percent reduction in CO2 emissions by 2030; 100 percent renewable energy by 2030, which will be electricity; a 15 percent improvement in water use efficiency in plants that are in high-risk areas for water; zero waste to landfills and 100 percent of packaging being recyclable, reusable, and compostable by 2025. Now COVID did some really interesting things to our numbers. We actually saw a 6 percent absolute reduction in emissions last year. But that's what happens when you idle some factories for a little bit. So it's interesting to think of what it’s going to look like going forward. I don't think we're going to crush it that hard every year, but we were really proud of that.
On the agricultural side, our goals are implementing 100 percent regenerative agriculture with our growers by 2030. There is no blueprint for what a regenerative potato looks like and some pretty significant barriers. So for us, it's been fun to kind of build that plan as we're flying it. We also have commitments around launching farms of the future, three of them globally, which will be commercial scale farms where we validate both the environmental and the economic business case for a lot of those regenerative practices.
Jennifer, Seaboard Foods: At Seaboard, we also have a multi-pillar sustainability plan, and we publish sustainability reports. We have been engaged in some long-range planning and research over the last several months. I was on the environmental sustainability and community relations team, which was charged with forecasting where environmental sustainability is going to go in the next several years. In our research and in talking to regulators, trade associations, and community leaders, it is clear that greenhouse gas emissions control the expectation around setting goals. We have not seen demands from customers around hard and fast goals, but I'm sure that is coming. We also anticipate that there will be financial reporting requirements, and potentially regulatory requirements. We are currently in the process of establishing a baseline greenhouse gas calculation, which is a major undertaking.
Also, to speak to the comment about support from the top level of your organization, that's a very important thing because it requires a lot of people resources and financial resources, and to have that commitment from the top is imperative.
2.) What are some of the challenges that you've encountered along the way? And how do you overcome them?
Barbara, BASF: I think one of the challenges that we have is that once you set KPIs, it is hard for you to start comparing. So McCain just told us that they will reduce emissions by 50 percent by 2030 and BASF is at 30 percent. What does that mean? Are we good enough? Are we doing everything we can so once you set a number, you're always benchmarking yourself against something else? To me, the biggest challenge is, is there a reason why we don't say we will reach these numbers two years from now? Progress is not linear as we want it to be, and this is difficult to communicate and not so easy to understand.
Our standard – the year that we selected as base for our CO2 emissions – is 2018. So this is the year we are using to then measure in 2030 and 2015. In 2019, we did a great job and we were able to reduce our CO2 emissions percentage-wise, though those numbers were not as good in 2020. There is a level of patience, of resilience that you need to keep up, because it's not only a progression, you will have setbacks, you will have to see why something is not going the way you want, you will see if the organization mentally is where you need to be, and have to examine who are your accelerators, who are your challengers?
Jess, McCain Foods: What you said, Barbara, really resonated with me. As far as regenerative ag goals, there's a ton of different vocabulary words you can use around this transition we need to see on the farm. But I think they may make farmers nervous, because it's about change. And oftentimes it costs money. But we do have time to get this right. And it won't happen overnight.
Some of the lessons we have learned at McCain are around governance. For example, we have global subject matter experts in each of those four goal areas who set the standards and the minimum for what we measure and report. And then mostly it's people in our regions who execute. But that wasn't always super clear in the beginning – where responsibilities began and ended, who was doing what, and that we were all measuring things in the same way. I also think the level of effort around reporting and validation is an important one. If you are publicly publishing progress on your sustainability goals, generally you'll want them audited, in the same way financial results would be audited. And if you're reporting your targets through, for example, the science-based target initiative, which ensures and verifies that your targets support and keep us on track to meet the commitments in the Paris Agreement, there has to be someone who that's their primary job.
I would also say that, especially if your goals affect your growers, involve them in the goal-setting process from the beginning so they feel ownership. One last lesson learned was around this base-lining, and how you're going to learn some really interesting things when you do your carbon footprint for the first time. For example, when we do a field-level carbon footprint on potatoes, over half of the emissions come from production of fertilizers, or embedded emissions. That's largely an addressable for McCain in the short- to medium-term. So we're already down to only 50 percent of on-farm emissions being something where we could maybe move the needle, which makes that baselining so important because it sets the stage for what we’re even talking about doing, and that was a big lesson learned for us.
Jennifer, Seaboard Foods: In terms of the lessons learned in the process of doing our baseline calculation, is that we are very good at tracking and controlling costs, and a lot of times that cost control leads to things that drive down your greenhouse gas emissions. I don't mean to imply that Seaboard has not undertaken projects that have had a greenhouse gas reduction effect, but we're not set up for tracking that. We don't track utility use, we track utility cost. So a big challenge has been to gather all of that data from five states of operations, different types of operations, and many, many vendors, and then set up tools that will enable us to track and compare from year to year.
3.) Do any of your C suite executives have climate change related or sustainability related performance indicators or goals as part of their annual performance goals, or incentive bonuses?
Jess, McCain Foods: Yes, it’s tied to variable compensation/a bonus. Everyone will have three to six strategic objectives that if you achieve them, you'll get more of your bonus. And for many, but not all people in the company, sustainability is now on that list. And so it will be whatever is relevant to your function, be it good food, smart and sustainable farming, resource efficient operations, whatever is material to your job.
Barbara, BASF: I don't know about our CEO and the board, but I can tell you that I have very concrete target goals related to a bonus and rewards. It's about what type of products we are selling BASF – and it took us years to classify all of its products, more than 66,000 products in different categories – to determine if they are accelerating a sustainable practice in a certain field, or if actually, they are challenging sustainability going forward. As someone in marketing, one of my goals is to ensure that if we have a product that is a challenger, we do something about it in less than five years – either take it out of the market, or do something with that product to change it. This is one that every year I am definitely measured by, and my personal bonus is connected to it.
Jennifer, Seaboard Foods: Our executive team does set goals, and part of our compensation is based on goal achievement, but at this time, we don't have a specific mandate from our CEO that those goals be sustainability-oriented. However, if your function within the company is partially to drive sustainability initiatives, then necessarily your compensation would be affected by achievement of those goals.
4). Do you work with any other companies on your climate change goals?
Barbara, BASF: Definitely, we have alliances and are part of associations like Future Market, which is more than 120 stakeholders in the value chain that work together to have a framework where we can all operate. We also work with other companies to identify the needed technologies to ensure that farming practices become more and more sustainable.
To note, if we learned one thing in this last year, it is that you can accomplish very little when you're operating by yourself; we really need the collective good to move things forward. This is especially true in farming because if each of us comes up with a different parameter, a different solution, that would be a nightmare for a farmer to implement. So I do not think that this [agriculture] is the space to compete, it is the space to cooperate.
Jess, McCain Foods: McCain has a number of relationships with specific companies for very specific technology for our manufacturing plants for potato farming. But when I think about broad-based kind of platforms or coalitions that we’re part of, as far as our actual factories go, we are resource efficient operations.
I would encourage folks who are looking to set goals to make sure that they set them and get them validated by Science Based Targets initiative (SBTi) because I see it increasingly becoming the bar that a lot of these goals will need to meet. We're also members of RE100. On the farming side, we're members of OPTB, which is a French-led coalition of many companies that focus on how there are many corporates working on advancing soil health and specifically biodiversity. There’s also the Potato Sustainability Alliance in the U.S., which collects data on certified growers.
But when you're thinking about how much you join, versus what you do alone, it also can come down to how are you thinking about sustainability as a competitive advantage for what you sell? Do you want to be first at something? When you think about it in that light, it's an individual strategic decision for every company.
Jennifer, Seaboard Foods: In the evaluation of our baseline greenhouse gas emissions calculation, we have hired a consultant to help guide us through the process.
6). Let's talk about policy. What sort of policies enable the work that you want to do in your respective companies to mitigate climate emissions or build more resilient companies? And what kind of policies may present barriers?
Jess, McCain Foods: This is me speaking personally, not as a representative of McCain Foods. But when I think about the number one thing that would make a difference in terms of aligning us to make progress, that is a price on carbon. And, making sure that the carbon price sets farmers up for success, that farmers are viewed as part of the solution to the climate crisis through sequestration. There's a lot of great lobbying efforts to be done around that, but I think we're pretty far away from that politically right now.
I also wanted to echo what Barbara said: I think your point around supportive land grant universities and extension is something that's been waning, sometimes federally-funded, sometimes state-funded, but definitely under threat. So we need to figure out how to bolster that and make sure those trainings are supporting the transitions we want to see.
Barbara, BASF: One of the main things for BASF is definitely our commitment to the Paris Climate Agreement. This is something that a country and nation authorities have to be committed to for a long time, otherwise it's difficult for us to know in which country which policies to follow. So if we want to reach long-term goals, we cannot change policies, even if the country is divided, as this just makes it very, very difficult. That is the reality. The other thing, especially thinking of agriculture, is boots on the ground. Farmers need support and the government is there to give support, be it financing, training, or education, which is very important.
Jennifer, Seaboard Foods: I agree with your comments. I'm not advocating for government mandates, but as you know, there is nothing like a government mandate to drive progress towards greenhouse gas reductions. I think incentive programs that assist those who are working towards greenhouse gas emissions reductions is also a really important support program. You see programs and policies, like the low carbon fuel standard in California, that are driving greenhouse gas reductions immensely. My company, Seaboard Energy, we're engaging in the generation of renewable natural gas, and that's largely driven by the low carbon fuel standard, and the sale of transportation fuel into the state of California. And that will reduce a lot of methane emissions.
ABOUT THE PANELISTS
Barbara Aguiar is director of marketing and business development for the Professional & Specialty Solutions business in BASF. Prior to that, she led the Communications and Industry Relations team for BASF Agricultural Solutions in North America. Born and raised in Sao Paulo, Brazil, Aguiar holds an MBA from the University of North Carolina and a master’s degree in International Affairs from the University of Pittsburgh. She has developed her career in the areas of marketing, communications, branding, and leadership engagement. Aguiar resides in Cary, North Carolina, after having worked at BASF headquarters in Germany for 10 years.
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Jennifer Nelson is the senior director of environmental affairs and environmental counsel for Seaboard Foods LLC and Seaboard Energy, LLC. Nelson joined Seaboard in 2001 after working with Seaboard Foods as a client of Lathrop & Gage, a Kansas City law firm. Her responsibilities for the companies and their subsidiaries and affiliates include environmental and health/safety compliance, permitting, special project logistics coordination, enforcement representation, acquisition diligence, and participation in sustainability initiatives.
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Jess Newman is senior director of agriculture & sustainability at McCain Foods. Her team is responsible for all vegetables purchased directly from farmers. They also implement McCain’s sustainability goal that 100 percent of farmers will be implementing regenerative agriculture by 2030. Newman is passionate about sustainability in agricultural supply chains. Her philosophy is to meet farmers where they are and help them move along the sustainability spectrum. She has worked at the UN Food and Agriculture Organization, Ecologic Institute, New York City Mayor’s Office of Sustainability, Booz & Company, CGIAR, and Anheuser-Busch. She holds a B.A. from Harvard, an MPA from Harvard, and an MBA from MIT.
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Dr. Beth Sauerhaft is a sustainability expert who has worked in the public, private, and non-profit sectors. She currently works at the American Farmland Trust where she supervises a rock-star team of national initiative directors and contributes to strategic direction and planning for the organization. She previously worked at PepsiCo where she introduced sustainability to the product innovation, budgetary and strategic planning processes of Corporate R&D and the agricultural supply chain; the US Environmental Protection Agency where she brought diverse agricultural stakeholder voices to the rulemaking process; and, the USDA Natural Resources Conservation Service where she developed national policy and worked with farmers to implement Farm Bill programs and put conservations practices on the ground. Sauerhaft earned her Ph.D. in arid land agroforestry from Texas A&M University; has a Masters of Environmental Management from Duke University in Natural Resource Ecology; and a BA degree in American Studies from Grinnell College.