92246 cutting-edge business solutions Agri Business How Companies Can Do It All: Increase Productivity. Ensure Quality. Manage Resources. Volume 01 | May 2014 Why SUSTAIN? How can businesses achieve and SUSTAIN stronger performance? How can they realize higher productivity, product quality and profitability while maintaining a positive impact on society and the environment? How do companies across the world, large and small, address sustainability challenges and how can they learn from each other? Finally, how can IFC leverage its unique vantage point at the intersection of business and development to convene an effective global conversation on cutting-edge sustainable business solutions? These were some of the questions that led to the creation of this magazine. We hope it will inspire you and add value to your business, bringing you fresh perspectives from the private sector, international organizations, academia, and the World Bank Group. About IFC IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In the last financial year (July 2012 — June 2013), our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org. ©Tran Thiet Dung, IFC w h y sustain?   May 2014  1 contents I. Business Solutions ENSURING QUALITY MANAGING RESOURCES III. Knowledge Hub 20 MARKS AND SPENCER 32 IBM Are Standards Standard Enough? Innovating in Kenya Challenges and opportunities in Smart strategies for water management ensuring good quality and sustainably INCREASING PRODUCTIVITY sourced products 46 Networks 8 MARS INC. Unleashing the Power of Genomics 36 SENSE-T The Data Revolution How a World How to redefine sustainable production 22 BAYER CROPSCIENCE Agripreneurship Shaking up the business of agriculture in Tasmania Economic Forum platform builds through science and partnerships Pursuing farmer, product and environmental excellence through partnerships 38 THE COCA-COLA COMPANY Water Wonders partnerships How the efficient use of water contributes to $1 billion in productivity that can drive 12 DIGITAL GREEN savings while improving millions of the future of Transforming rural farms one lives and the environment agribusiness video at a time in South Asia 40 UN ENVIRONMENT PROGRAM and Africa An Olive Branch in the West Bank AUNEP & IFC on how a water waste problem becomes its own solution ©World Economic Forum 48 Academia ©Digital Green UC Davis, one the world’s leading 14 ALQUERIA 26 METRO GROUP II. Country Spotlight agricultural universities, on the Building a Profit Pipeline Converging for Quality global food system How to harness the potential of small dairy How to address food safety issues farmers and retailers in Colombia throughout global supply chains 52 Communications 16 VODAFONE FOUNDATION IN INDIA 28 SGS 42 Myanmar Open for A Financial Times reporter’s view Empowering Women Beyond Safety Measures on how to tell the sustainability agribusiness Agri-entrepreneurs Increasing customer confidence story and why it matters A mobile application unlocks efficiency and competitiveness through food gains in India safety standards The Guardian’s Sustainable Business Blog: Courses 30 WORLD COCOA FOUNDATION ECOM on communications and 18 Brewing Up a Breakthrough Cocoa Collaboration sustainability How specialized farmer training for women The cocoa industry’s outlook gets is a game-changer in coffee production in sweeter by taking a holistic view 54 Publications East Asia ©Peter Adams / offset.com 2 SUSTAIN: Cutting-edge business solutions c ont ents   May 2014  3 BY agricultural development. We combine investments and advisory services to help the sector address Mary Porter Peschka Global Acting Director, Advisory Services, IFC supply and demand challenges and opportunities in climate-smart and socially inclusive ways. We also German Vegarra support global initiatives for sustainable production Global Head, Agribusiness & Forestry, IFC of agricultural commodities. Why AGRIBUSINESS? At the end of June 2013, IFC’s investment portfolio in agriculture and forestry totaled $4.25 billion. In 2012 It is a bleak statistic for an already alone, our investments helped our clients reach MAGAZINE CREDITS overworked planet: a world that 3.1 million farmers. Executive Editor: Daniel James Crabtree by 2050 will be bursting with over In this magazine, we offer a first-hand insight into how Managing Editor: forward-thinking companies and organizations have Emmanouela (Emmy) Markoglou 9 billion people. That’s an additional increased agri-productivity, delivered quality products Senior Editor: Caitriona Palmer to markets, and managed vital resources more efficiently. two billion people that must These approaches can be replicated by other companies — Production Coordinator: Valerie Prassl be fed and clothed every day including IFC clients — to address common challenges. Creative Direction and Design: amid a growing scarcity of, and They include companies such as Alqueria, Bayer, Ecom, Corey McPherson Nash Coca-Cola, IBM, Marks and Spencer, Mars, Metro, and Special thanks to Dieter Fischer, conflict over, land, water and Sense-T in addition to contributors like the Cherie Blair Rita Jupe, Serene Jweied, Gene Moses, Joseph Rebello, Brad Roberts, Daniel Foundation, the Vodafone Foundation, the UN, the Street, Selcuk Tanatar, Juergen Voegele energy resources. University of California at Davis, the World Economic and Bruce Wise for their strategic guidance and to Jeanine Delay, Mark Forum, and the World Cocoa Foundation. Lindop, Miguel Martins, and Rob Wright For those working in agriculture, the challenges have never for their creative direction. been greater. These include the impacts of climate-related We are also offering a collection of useful resources disasters such as droughts in Africa and Asia as well as including reports, tools and advice, from the IFC would also like to thank the governments of Ireland, Luxembourg, increasing energy costs, growing waste and eco-system World Bank Group, academia, media and other the Netherlands, Norway, and damage across the globe. Inefficient farming practices, international organizations who are on the front lines Switzerland for their support in producing this magazine. including low-technology farming, complicate the picture. of sustainability and business. While these problems may seem intractable, many innovative We hope you will enjoy reading about the experiences business solutions — showcased in this magazine — are and ideas laid out in this magazine. We look forward to already delivering win-win outcomes in terms of financial working together with you to deliver sustainable solutions returns and sustainable development. These breakthroughs to the toughest problems that lie at the critical intersection of technology and ideas not only maximize productivity, but between business and development. Because — as it is also also optimize delivery across a far more complex landscape highlighted throughout this magazine — it is only through of financial, environmental and social outcomes. constructive partnerships that we can achieve true progress. At IFC, we know that unleashing the creative power of the private sector is critical to ensuring sustainable and equitable 4 SUSTAIN: Cutting-edge business solutions w h y agribusine ss?   May 2014  5 FACTS & FIGURES 60-70% increase in food production is needed to feed more than 9 billion people by 2050. 1 73% 80% is the expected increase of the food consumed in the demand for meat in a large part of by 2050, driven from an the developing world emerging global is provided by middle class. 1 small farmers. 3 79% 70% ©Shafiqul Akhter, Lal Teer, Bangladesh increase in productivity of the world’s freshwater 842 MILLION $3.5 can be expected if withdrawals are used is the cost to the global smallholder farmers in agriculture— economy caused by adopt sustainable agricultural practices. 1 this reaches 95% in developing countries. 1 PEOPLE lost productivity related to malnutrition experienced chronic hunger in 2011-13. 1 TRILLION and lack of direct 38.5% 1/4 to 1/3 health care. 1 $ 450 of the world’s land is of all food produced for 100-150 MILLION is the estimated global dedicated to agriculture. 1 human consumption demand for small farmer is lost or wasted. 2 PEOPLE agricultural finance.˚ could escape hunger BILLION if women farmers had the same access to productivity resources as men. 1 1 Food and Agriculture Organization of the United Nations (FAO) 2 FAO and World Resources Institute – World Food Price Watch, February 2014 3 UN Report 2013, Smallholders, food security and the environment ©Zahidul Naim Zakaria, IFC ˚ Catalyzing Smallholder Agricultural Finance report, published by Dalberg in September 2012. 6 SUSTAIN: Cutting-edge business solutions facts & Figure s   May 2014  7 Unleashing the POWE R At Mars we are trying to use genomics to improve the lot of small farmers in our supply chain while protecting the environment. As one of the world’s leading food manufacturers, we OF GENOMI CS are also moving toward 100% certified sustainable sourcing for most of our key agricultural raw materials. But Mars is also working to ensure certification does not lock in poverty for farmers, but instead, becomes a means to pull them into prosperity. How can genomics help us get there? In 2010, when we sequenced, assembled and annotated the How Mars Inc. redefines genome of cacao, the tree that grows the seeds that become cocoa, we put the results in the public domain for anyone to access freely sustainable production and without restriction. We wanted more and better chocolate to be bred for Mars and to raise the incomes of the cacao farmers who supply us. through science and Consider this: cacao productivity has been a flat line for the past century, the world average being less than 500 kilos per hectare. With a little of the right fertilizer, a little training, and new, partnerships more productive germplasm (developed in our genomics work) to graft to aging trees, farmers can triple that yield to 1.5+ tonnes per hectare. As a result, cocoa farmers will become more prosperous, send BY their children to school, and not be seduced into switching from cacao to palm oil or rubber. They will also be less prone to cutting Howard-Yana Shapiro, PhD down forests in order to plant more low-productivity cacao. This Chief Agricultural Officer, Mars, Incorporated; approach leads to a win-win-win strategy for all: farmers, the Senior Fellow at the College of Agriculture & environment and Mars. Environmental Sciences, at the University of California at Davis; Distinguished Fellow at the Sequencing the cacao genome gave me the germ of an idea World Agroforestry Centre in Nairobi, Kenya that became the African Orphan Crops Consortium (AOCC). The consortium is an uncommon collaboration of African governments, companies, NGOs and international agencies pledged to sequence and re-sequence the genomes of 101 African “back-garden” food and tree crop varieties. These crops are crucial to the 600 million people who live in All Photography: ©Mars Incorporated rural Africa but are of little interest to the scientific community Illustration: Morphart Creation, Veer because they are not traded internationally. 8 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  9 Cutting-edge solution: Enhancing the productivity of small farmers and the sustainability of crops through genomics Featured Interview How did you discover an interest in What lessons can you impart to food and farming? IFC’s agribusiness clients? With a little of the right fertilizer, a little training, and new, more I grew up in New York in an extended family of holocaust Firstly, spend your money. If you are trying to productive germplasm, cacao farmers can become more productive. survivors from eastern Europe. Because of what they solve issues surrounding a key ingredient, then suffered, food was very important. I spent summers of my put money on the table to do it. Secondly, form The AOCC is not charity. Mars has a “Food Segment” (best childhood working in the fields of family farms. My father, uncommon collaborations—governments, known for Uncle Ben’s rice products) that excels at producing a scientist, taught me to think systematically. My mother universities, farmers, NGO’s, other companies— and packaging quality foods anywhere in the world. It is taught me the joy of abstract thought. I have combined both don’t leave anyone out or operate under the radar. hoping to produce nutritious products that Africans can in my life’s work. Thirdly, work together pre-competitively. Why afford. In addition, Mars’ Petcare Segment, the largest pet work alone when your competitors have the same food producer in the world, is searching for alternative Seeds of Change was founded in the late issues? Fourthly, always use the best new science. sources of protein so that its pet foods are not competing 1980’s and sold to Mars a decade later. Early adapters are usually the big winners. with humans for protein. How was that transition? You have been likened to everything Is there a “sweet spot” where AOCC and the ambitions It was a nascent business that existed because of the from Santa Claus to a member of our food and petcare segments all overlap? dedication of a few individuals, and great seed farmers concerned about the preservation of biodiversity and the of the band ZZ Top. How do you Cassava produces a big, drought-resistant tuber in much production of organic seed. We worked day and night to navigate corporate America with of Africa that fills bellies with starch, but not much nutrition. build the network • sleeping on the floor at growers’ homes that beard? Yet its leaves are very high in protein. Can they be processed to save money, sharing meals with their families. We were and packaged to help improve the food security of Africa? There are not too many other long beards in this living the dream. To take on the conservative and monolithic business of seed production was an audacious idea. That said, business. I talk to many presidents and CEOs of A few years ago, Mars bought Wrigley, which uses mint in we built an extraordinary fundamental seed business that other big companies and once they get over the some 70-80% of its chewing gum products. Much of this mint changed the world. shock that I’m the person they need to talk to they comes from the northwestern United States, where we help realize that together we can make a difference. farmers grow higher quality mint, while at the same time ≥ When scientist Howard-Yana Shapiro is not When we sold the company to Mars in 1997, the transition helping them use water more efficiently and be more mapping crop genomics, he is riding one of his felt very complicated, both intellectually and emotionally. We all want to be in business in 100 years. energy-efficient. collector classic motorcycles through the back I realized very quickly that we had an opportunity to The solutions we find will need to be revised We are also helping small farmers in India become more roads of northern California. influence one of the biggest food companies in the world. and improved many times during that period. efficient in mint production. Privately held, the owners of Mars possessed a long-term Companies, like Mars, Incorporated continuously An icon of the sustainability world with an view which is missing in almost all businesses today. look into what is needed and plan for a And we are sequencing the mint genome, which should help idiosyncratic boardroom look, Shapiro is one of More than fifteen years later we have never looked back. sustainable future. • us breed higher quality, hardier, more flavorful and more corporate America’s most influential voices. Here, profitable mint varieties for the farmers of the Pacific Shapiro talks with IFC about the humble origins of the organic seed company, Seeds of Change, what Mars created history with the mapping of Read more of this interview online at Northwest and India. www.sustainbusiness.org agribusiness companies can learn from failure, the cacao genome in 2010. Why did you urge Mars is part of an international collaboration to sequence the and how he navigates corporate America with his Mars to go down this path? genome of the peanut, which will produce peanuts resistant unconventional beard. to aflatoxins. If we could figure out how to do that in peanuts, When you have a business, no matter what it is, if you cannot perhaps we could do it in other crops, and improve nutrition ensure the sustainability of your fundamental ingredient, all over the world. you need to either get out of that business or fix the problem. That was my rap to the powers-that-be at Mars about About Mars and IFC It is an age-old idea, one that agricultural universities and sequencing the genome of the cacao tree. They understood Mars and IFC have been working together since 2006 in extension services in the US and elsewhere have long immediately the rationale and agreed that we should place Indonesia, where they set up the Cocoa Sustainability pondered and pursued: how to give famers better seeds to the completed genome in the public domain for unrestricted Partnership, a multi-stakeholder forum on cocoa improve productivity and quality. use by scientists everywhere. collaboration, and also joined forces with Rainforest Alliance to train farmers in sustainable cocoa practices, through a project At Mars we are trying to do that today. The high-tech science funded by IFC's Biodiversity and Agricultural Commodities Program (BACP). of genomics offers an excellent opportunity not only to increase agricultural sustainability but to save millions of lives in Africa. • 10 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  11 Cutting-edge solution: Combining video technology with social interaction  View videos online at www.digitalgreen.org/discover to improve productivity and the lives of small farmers Growing up in New Jersey, Rikin Gandhi dreamt of becoming an Unlike the government programs that had astronaut. He spent hours rifling through the newspaper for NASA alienated many farmers, Rikin discovered that stories, pasting them into an album devoted to his hero astronauts. when these videos were played in a small, 10-15 person group setting with a facilitator, the A gifted student, Rikin trained his sights on joining the NASA space farmers really took note. program. He earned a pilot’s license, and studied aeronautical and astronautical engineering at MIT. With support from Microsoft Research, Rikin set up a controlled trial. Among 1,470 households In 2006, Rikin turned his skyward gaze to the lives of small farmers. in 16 villages, Digital Green’s approach increased He wanted to transform the lives of these farmers, many in or adoption of some agricultural practices sevenfold nearing poverty, through information. Rikin travelled to India, over control villages. Working with the seeking to apply his analytics systems training to rural agriculture. Gates Foundation and other donors, Digital Green Working with Microsoft Research, he spent six months exploring has now produced over 2,800 videos in how video technology can spread good agricultural practices. 20 languages, working with over 150,000 farmers Rikin emerged fluent in the local language and armed with an in India, Ethiopia, Ghana and Tanzania and audaciously simple yet intriguing proposal: to equip and train local hopes to scale to one million by 2015. partners with easy-to-use video equipment that would record rural Critical to the success of this effort has farmers sharing their best practices. So, instead of flying a spaceship, been Digital Green’s partnerships with NGOs, Rikin Gandhi is now steering Digital Green, a unique, non-profit companies and government programs. These organization that marries technology and social interaction. partners now film, edit, produce and post the “Often we talk about sustainability in the context of the environment videos, using simple battery-operated cameras, Digital or the financial world,” said Kentaro Toyama, chair of Digital Green’s thereby facilitating farmer-to-farmer interaction. board. “But I think that there is an under emphasis on the sustainability of human capacity. Farmers that engage with 2,800 videos produced in 20 languages Green 150,000 farmers reached in India, Ethiopia, Ghana and Tanzania One million farmers expected to be reached by 2015 Transforming rural farms one video Digital Green gain a level of self-efficacy and self-confidence about how they can change their lives.” “Technology is only 20% of this,” said Vinay Kumar, COO of Digital Green. “Eighty percent is human mediation, human organization and social at a time in South Asia and Africa For decades, the Indian government has attempted to introduce new varieties of seed and fertilizer through a large, 100,000-staffed mobilization.” extension program. While this effort has helped in the more irrigated Digital Green makes the farmer videos available northern states of Punjab and Haryana, it has largely failed to help on YouTube, with training manuals and standard BY farmers in poorer states with weaker capacities. operating procedures. This has allowed rapid Enter Rikin Gandhi, who found program expansion, but with a continued Caitriona Palmer grassroots touch. Digital Green is now expanding inspiration in a successful outreach Communications Consultant, into health and hygiene programs. Advisory Services, IFC effort called Digital Study Hall that involved distributing instructional For veteran development expert Vinay Kumar videos made by urban teachers to who joined Digital Green in 2006, this new with contributions from Brad Roberts, classrooms in rural Uttar Pradesh. development is further confirmation of how Agribusiness Specialist, Advisory Services, IFC Applying similar principles, Rikin innovative technology combined with social travelled to Karnataka and exper- mobilization can transform lives. • imented with training locals to produce short informational videos Rikin Gandhi, featuring local farmers. All Photography: ©Digital Green Founder of Digital Green 12 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  13 Cutting-edge solution: Bringing together small-scale dairy farmers and retail outlets to increase dairy farming productivity in Colombia Building a Through an innovative distribution network known as pre-sales, Alqueria accounts for over half of its revenue by having company staff visit small-scale retailers nation- Profit Pipeline wide, taking orders to be delivered the following day. A mobile application allows orders to be uploaded and transmitted through cellular phones. Maintaining trust with their suppliers, payment is ©Edwin Huffman, World Bank made directly to delivery personnel on a purely cash How Alqueria harnesses the potential of small basis. In more remote areas, a creative system known as micro-sales, allows one person to serve as an dairy farmers and retailers in Colombia Cavelier’s conviction that all Colombians should have access to safe milk led him to buy a pasteurization plant independent distributor to small retailers in that area. That distributor uses their home as a mini-warehouse in the city of Medellin, nestled in the shade of the Andes, and Alqueria sometimes provides financing for a small in 1959. Now, fifty-five years later, Alqueria S.A, is the truck or motorcycle. country’s third-largest dairy company and second in fluid Alqueria’s model has improved the lives of thousands of milk, with revenues of $354 million, 4,500 direct and low-income farmers across Colombia while reaping an indirect employees, a 16% share of the Colombian milk impressive profit margin for the family held company. market (in liters) and 25% of the Ultra High Temperature This, according to Carlos Enrique Cavelier, is a fitting milk (UHT) market. tribute to the legacy his great grandfather Jorge left The patriarch of the Cavelier empire may have behind. revolutionized the processing of raw milk in Colombia but “Now I can go out to the communities and see how the his family successors have been equally bold, pursuing flow of income helps people, as opposed to alternatives a unique and inclusive business model that has been the with the informal market that do not pay consistently,” driving force behind their continuing growth. Cavelier said. “These communities now have real access Under the direction of Jorge’s son, Enrique, and now his to the modern economy.” • grandson, Carlos Enrique, Alqueria has built an innova- tive business model that relies on low-income populations (dairy farmers on the supply side and retailers on the Alqueria grounded distribution side). It is estimated that, on a daily basis, Alqueria visits more its business model than 150,000 small scale retailers. Critical to the process has been sourcing milk from over 5,500 independent on forming personal, farmers – most of whom produce less than 200 liters of milk a day and some of them, remarkably, as little rock-solid relationships as 10 liters a day. The company engages these farmers through a strong network of intermediaries including with farmers. cooperatives and independent milk tanks belonging to Alqueria, who help with the collection and payment processes, particularly in more remote areas. Foregoing the secure safety net of long-term supply BY About Alqueria and IFC contracts, Alqueria has decided to ground its business Alqueria has been an IFC client since 2010. IFC has provided the company Juan Gonzalo Flores model on forming personal, rock-solid relationships with with long-term financing in the form of $5 million in equity and $15 mil- Senior Investment Officer, Agribusiness & Forestry, farmers and establishing a reputation for paying farmers lion in debt, enabling the company to increase milk sourcing by bringing Investment Services, Latin America and on time. the Caribbean, IFC ALQUERIA’S additional dairy farmers into the supply base, helping new farmers to REVENUES The company has also maintained a generous financing emerge, and increasing volumes from current suppliers. In 2012, IFC also and technical assistance program, offering microcredit conducted a resource efficiency assessment of Alqueria’s plant in Cajica, $354 financing, advice on appropriate feed rations, and Some of the world’s greatest innovations emerge from leading to significant energy and water savings. buying fodder and fertilizer in bulk to keep production Alqueria was recognized at the 2013 FT/IFC Sustainable Finance Awards, the simplest of ideas. For Colombian physician Jorge costs down. the world’s leading awards for environmentally and socially responsible MILLION Cavelier, that innovation was a belief in the magical banking and investment, in London, in June 2013. It was shortlisted for the ‘Achievement in Inclusive Business‘ award. health and nutritional benefits of pasteurized milk. 14 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  15 Cutting-edge solution: Using cell phone applications for smart stock management that boosts women’s productivity and income in agricultural value chains in Gujarat, India Estefany Marte, a woman entrepreneur from Santo Domingo, Dominican Republic recently wrote in a blog “I went into the fruit business because I fell in love with it and had the opportunity to take it over from my father. The fruit industry is not famous for being frequented by women entrepreneurs, so it was a challenge to win respect from my suppliers and staff, especially since they had been working with a man for the past 30 years.” Estefany is not alone. Women — who produce more than half of Empowering the world’s food — are often shut out from land ownership. They tend to have smaller plots, travel longer distances to markets, lack ©Vodafone Foundation market price information as well as agricultural inputs. As a result, they are less productive and miss out on valuable earnings, money that could feed their families and educate their children. Women At the same time, poor information flow in rural markets can impact productivity and there is a critical need for technological innovations to improve the supply chain. The use of a cell phone with the right application can address some of these market failures, including Agri-entrepreneurs inefficient stock management processes. One innovative example of improving rural supply chain challenges through the use of mobile phones can be found in Gujarat, a highly entrepreneurial state in India. Here, the Self ©Cherie Blair Foundation for Women/Matthew Strickland Employed Women’s Association (SEWA), the Vodafone Foundation in India and the Cherie Blair Foundation for Women have joined hands ≥ Suryaben, distributor in India (right) training Bhavanaben, to develop a mobile-based Management Information System (MIS) another distributor in the RUDI network (left) for SEWA’s rural agricultural distribution network. The members of the network procure farm produce from farmers at Travel time to markets has been reduced, market prices, which they then process and package before selling commodity stock outs largely avoided, and the it through a network of saleswomen. The network’s reach and scale women report that they are able to run their has increased dramatically, exposing the challenges of paper-based businesses much more efficiently. Local farmers, inventory management and sales reporting. in turn, have reported increased sales. The MIS solution is a user-friendly application targeted at 2,500 women entrepreneurs. The women can capture sales and place orders In February 2014 the The Vodafone Foundation in India for additional stock via SMS in their mobile phones. Data is captured on a central database providing information for the network’s application won the managerial, financial and audit requirements. With the help of Best Mobile Product, unlocks efficiency gains through training, the women can generate simple reports on their handset, Initiative or Service giving them essential information to improve their business. the use of a mobile application The project aims to increase overall sales by 25%. Since its launch in in Emerging Markets award at the World Mobile December 2012, many women have reported significant increases in their monthly sales, in some cases up to four times as much. Congress in Barcelona. BY We know that integrated gender technology solutions work best only when they are context adapted and locally owned. If linkages in the Henriette Kolb supply chain are significantly flawed, no tech Head, Gender Secretariat, IFC solution in the world can solve the problem alone. No application — however innovative — will mend persistent and deep rooted gender inequalities in India. But as female small farmers in Gujarat have discovered, sometimes just a mobile phone and an innovative approach can help get goods to market on time and at the right price. • 16 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  17 Cutting-edge solution: Increasing coffee farm productivity in Indonesia and Vietnam through gender mapping and specialized training It is a precious commodity that kick-starts On investigation, the project team found that women often assumed the training was for men the day for billions of people across the and many also felt culturally uncomfortable in a Brewing Up a planet. Coffee: the ubiquitous urban nectar mixed room with a male trainer. that is consumed 12,000 times every second When Ecom realized that a large share of their around the globe. training budget was essentially being wasted, For many readers of this magazine, your morning cup of they immediately took action and went back to coffee is likely to come from Indonesia or Vietnam, two of the the drawing board with IFC to drastically rethink Breakthrough world’s largest coffee producers. These tropical havens house their training protocols. tens of thousands of coffee bean farms that employ over Male trainers were replaced with female two and a half million people, small farmers who trainers and consultants specializing in rely on coffee as their main source of income. gender awareness were brought on For Ecom Agroindustrial Corp Ltd, a global board to assist in revised Training of commodity trading company with a specialty Trainers. With special sensitivities in coffee and cocoa, meeting consumer to the cultural traditions, training How Ecom’s specialized farmer training demand for sustainably grown coffee has become a constant challenge. materials were rewritten to appeal to a female audience. For those women with low literacy rates, specialized training for women is a game-changer in coffee In 2011, Ecom in conjunction with IFC, scaled up its farmer training programs in both Indonesia and materials were devised. In addition, the timing of the training sessions production in East Asia Vietnam to increase productivity, sustainability, and to improve the quality of their coffee beans. was realigned to suit the rhythms of family farm life and for women in more remote areas, sessions The plan was simple: IFC would help Ecom train their field were moved to locations nearer to their homes. staff to get closer to their small farmer suppliers by imparting Female farmers with leadership skills were BY valuable knowledge on how to grow better and more assigned to organize farmer meetings. Ian Crosby Anup Jagwani sustainable coffee plants in farmer training centers across Indonesia and Vietnam. As a result, in Indonesia, female participation Manager, Advisory Services, Principal Investment Officer, East Asia and the Pacific, IFC Agribusiness & Forestry, in the training increased from 16% to 27% and Investment Services, IFC more than doubled from 12% to 25% in Vietnam. In north Sumatra, coffee farmers who had “Our focus was to train our field staff and participated in joint male/female training their managers to work directly with reported a 92% increase in their productivity farmers and to help train them with good levels while those who did not receive training reported only a 37% productivity increase. agricultural and sustainability practices.” Realizing that the experience could resonate - Serge Mantienne with other commodities such as cocoa, Ecom Sustainability Manager for Ecom in Vietnam has embraced the application of an ‘on the farm’ gender mapping tool to future projects, paving the way for significant cost savings. When the training centers opened for business, classrooms “Our business is coffee and we want the were full of eager participants but with one major exception: production to keep going,” said Laurent there were hardly any female coffee farmers in attendance, Bossolasco, sustainability manager for Ecom all the more puzzling given that in north Sumatra, Indonesia, in Indonesia. “If we are delivering the wrong for example, 70% to 80% of the coffee farming activities are training package, then, from a business point handled by women. of view, we need to fix that and involve the North Sumatra 70%-80% correct stakeholder.” • of coffee farming activities About Ecom and IFC are handled by women in Ecom has been an IFC investment and advisory client since North Sumatra, Indonesia 2006. IFC has provided the company with $154 million in financing as well as with advisory services on how to strengthen the ability of its coffee suppliers to (a) meet international standards for quality and (b) adopt sustainable practices. All Photography: ©Ecom 18 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / incr e asing productivit y   May 2014  19 Cutting-edge solution: Improving the company’s sourcing resilience by helping its suppliers run their businesses more profitably while being good environmental and social custodians Are How have your efforts around Interview with Fiona Wheatley, Sustainable Development Manager, standards affected company Marks and Spencer profits and growth? Standards Improving efficiency and productivity is a fundamental benefit of participating in sustain- ability standards. Helping our suppliers run their businesses more profitably while also being good How does Marks & Spencer environmental and social custodians is a core Standard work to ensure quality, objective of M&S Plan A (our sustainability plan). This in turn makes a positive contribution to safety, environmental and M&S sourcing resilience. Enough? social standards for each Which is the biggest obstacle to improving standards? of its products? There is an ongoing tension between the The breadth of product range and the complexity of retail perceived need for all-encompassing standards supply chains make it difficult for retail companies like ours versus the desire to improve the lives of the How Marks & Spencer handles to participate in every standards initiative. However, M&S broadest spectrum of producers, particularly very has extensively collaborated with a range of standards small scale producers. More effort is needed to challenges and opportunities organizations. Examples include M&S membership of the create the enabling environment for widespread Roundtable on Sustainable Palm Oil (RSPO) Board of adoption of standards and also to build producer in ensuring good quality and Governors to call for more demanding principles and criteria capacity to collaborate and engage in sustainably sourced products on deforestation and peat land conversion, as well as M&S improvement programs. We must continue to field trials in the UK, Kenya and South Africa to support the seek ways to motivate and reward participation development of the Water Stewardship Standard. in and commitment to standards, despite the fact that some producers may not yet be How do sustainability standards help ‘sustainable’ producers. BY or hinder business competitiveness? How does M&S navigate the many Standards can prevent a proliferation of different Kate Bottriell standards that are out there? interpretations of what ‘sustainability’ entails. There has Environmental and Social Standards Specialist, been a tendency to assume we will all adopt the lowest cost The M&S product range touches on almost every Advisory Services, IFC standard. However, there is little evidence to support this region of the world and the company is supplied and in fact in the UK and European market early adopters directly and indirectly by a vast network of have consistently selected the most demanding standards. producers of many shapes, sizes and scales. Also, where there is more than one standard, as in timber In deciding which type of standard to use, (e.g., PEFC and FSC), there can be healthy ‘competitive’ we will consider the extent of our influence, our pressure towards higher standards and harmonization. knowledge of the issues involved, and whether there is a desire for market differentiation or What does a good standard look like? across-the-board improvement. • In order for standards to have business support, they have to be credible, relevant, practical and economically viable. Standards or certification…which is best? The work in Kenya and South Africa was originally conceived as a certification scheme. However, what the field trials showed was that the primary value of a standard is the creation of a framework for engagement and cooperation. As a result, the development of supplier business models is increasingly focused on participation and capacity development, geared towards collective action. This may lead ©Marks & Spencer companies to seek certification, but certification is no longer ©Marks & Spencer the central feature, nor a prerequisite. 20 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  21 Cutting-edge solution: Using integrated crop practices to achieve economic, environmental, and social sustainability Agripreneu rship How Bayer pursues farmer, The Earth’s population currently stands at around 7 billion. By 2050, it is expected to grow to more than 9 billion. Population growth, changing consumption patterns, access to resources, weather fluctuations, product and environmental poverty and equal opportunities represent huge challenges for society, politicians and innovative companies like Bayer. Bayer is addressing these excellence through challenges responsibly. In line with its mission “Science For A Better Life,” Bayer is making relevant contributions to help solve the major challenges of our time. partnerships As long as 300 years ago, Hans Carl von Carlowitz, a mining inspector in Germany, recognized the importance of sustainable reforestation in ensuring a lasting supply BY of wood as a raw material for energy. Today, our challenge is global food security, Dr. Birgitt Walz-Tylla which requires a further intensification of Head of Sustainability, Bayer CropScience agricultural productivity in a sustainable way. We at Bayer CropScience are taking responsibility and bringing our innovation leadership to the table. Sustainability is a key element of our business strategies. And, above all, through our innovations, products and customized services, it is integral to our business activities. In our view, a sustainable approach connects economic success with environmental and social responsibility. This is something that Bayer has always done throughout its 150 years of history. We know that sustainability is “Good Entrepreneurial Practice” and has a long history. Today, Bayer CropScience supports farmers worldwide, offering integrated crop solutions based on seeds and traits, chemical and biological crop protection solutions, services and proactive product stewardship measures to practice sustainable agriculture and to be good “agripreneurs.” All Photography: ©Bayer CropScience 22 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  23 Testimonials Cultivating partnerships to increase BY agricultural yields Oksana Varodi Emphasizing the Senior Agribusiness Officer & Program Manager, Advisory Services, Europe and need for a more Central Asia, IFC ACCESSIBILITY holistic approach to drive up agricultural yields, FARMER Bayer CropScience “Our farm started using bank loans in 2003. Thanks proposes a to Bayer and IFC, we can now use promissory notes five-point-plan to guaranteed by the bank as a financing tool. Before this bring about a program we were saddled with interest rates up to 20%. “New Revolution in Agriculture.” Five key points But today, we are paying only 4.5%. That’s an are crucial: innovation, which requires investment extraordinary fourfold difference. As a result, our debt in research and development; access for farmers, big pressure on the farm has been reduced, especially during and small, to tools, technology and training; more the spring when we need working capital financing to buy sustainable approaches in agriculture; enhancing seeds, fertilizers, fuel, and crop protection products. Even human health; and extending partnerships. though three years ago we were among the few who were In essence, the sustainable intensification of using this financing tool, now there are many small and agriculture requires closer collaboration among medium-sized farmers like us, who have access to different stakeholders. Amidst the trends of lowered affordable financing thanks to this program.” public and private investment in the agricultural – Pavlo Kalenych sector, the exchange of agricultural expertise, insights, technologies, and resources Farmer, Farm “Olgopil,” Vinnytska Oblast, Ukraine is indispensable. Contributing to sustainable food production We cannot do this alone; we need strong private through the provision of flowering strips, bee hotels or BANKER Bayer CropScience’s contribution to sustainable partners like IFC. Together, we support nesting places for birds. But farming is not just about “Thanks to the risk sharing partnership with IFC and agriculture is a new concept called “Bayer Forward modernization of agriculture in Ukraine and producing the basis for our daily food. It is also about Bayer, we were able to start offering innovative small Farming,” demonstrating profitable and resource- help the country maximize its farming potential. profitability and economic success for farmers and support and medium enterprises financing to farmers for the efficient production of high-quality food. The concept for them as economic contributors to their communities, first time in Ukraine. Now most financial institutions comprises the development of technologies that go especially in rural areas. Strengthening small and medium-sized and input suppliers in the market are replicating this well beyond compliance requirements and high-level farms in Ukraine type of financing and the small and medium enterprise cooperation with key stakeholders such as politicians, farmer financing market in Ukraine is transformed. In national authorities and NGOs. One cornerstone of this Improving bee health Ukraine is one of the world’s leading exporters of 2013, our program portfolio reached $10 million per an- program is a growing network of farms across Europe. grains, oilseeds and vegetable oil. The aim of the Bees play an important part in the agricultural landscape, num. In 2014, we plan to double our portfolio through an These “Forward Farms” act as “centers of excellence” partnership with IFC is to enable farmers in the providing pollination services which are necessary to ensure intensive educational program for farmers, dealers, and demonstrating sustainable agriculture. The aim is to Ukraine to increase yields and yield quality and the production of a wide variety of foods. In collaboration bank staff as well as through simplified business process- improve agricultural production in a sustainable reduce costs. Bayer CropScience and IFC strive to with farmers, beekeepers, researchers, industry, politicians es introduced with the support of IFC’s advisory services.” manner to secure a stable supply of high-quality and help more than 20,000 small and medium-sized and NGOs, Bayer has researched solutions to improve bee affordable food. farms gain broader access to agricultural knowledge, – Nikolay Volkov health for more than 25 years. With the “Bayer Bee Care inputs such as crop protection products, high-tech Head of Regional Corporate Clients Division, In addition, at the Bayer Forward Farms, we demonstrate Center” in Monheim, Germany and a second center which solutions, e.g., precision farming systems, and Raiffeisen Bank Aval, Ukraine product stewardship measures to protect human health just opened in North Carolina, USA, Bayer provides a dialog technology transfer. and preserve the environment. It is about the responsible platform to engage with interested stakeholders to improve management of natural resources such as water and soil bee health and promote the planting of more bee and It is also crucial to connect farmers with supply and the biodiversity of our agricultural ecosystems, e.g., pollinator habitats. chains, because many farmers have limited access to markets. Finally, farmers in Ukraine not only require unrestricted choice about which crop to grow and which production method to employ, they also need access to financing, coherent agricultural policies, free trade, and open markets. About Bayer and IFC We are convinced that, to make progress towards Bayer has been an IFC advisory client since 2013. IFC and Bayer have enhancing food security, it is essential that embarked on a new partnership to modernize agriculture in Ukraine we work together — in Ukraine and worldwide. through the most innovative technologies and high-tech solutions, including sustainable farm management practices, remote crop-sensing Bayer CropScience has forged a growing number technologies, and precision farming practices. of partnerships all over the world to jointly pursue innovative solutions for enhancing sustainable agriculture. • 24 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  25 Cutting-edge solution: Developing an assessment program which builds on the Global Food Safety Initiative (GFSI), raises capabilities within supply chains and guides companies to full certification in Competition does not help in tackling Egypt, Vietnam, China, India, Russia and Ukraine this challenge. We must work together. Converging which today builds the basis of the global market’s tool Your standards strategy is global but within the GFSI, to raise capabilities in the supply chain originates from Germany. How do you and to guide the companies to full certification. With this apply the same standards in Germany program we run projects in Egypt, Vietnam, China, India, as you do, for example, in Ukraine? Russia and the Ukraine in order to help our suppliers meet customers’ expectations. To operate efficiently in the supply chain, standardization for Quality is a pre-requisite for business. We believe that there must What was the biggest challenge in rolling be one single standardization solution throughout the out your sustainability programs? supply chain that works for our sales lines as well as for our competitors. A sector-wide, efficient solution helps Our biggest hurdle was convincing other companies — our partners in the supply chain to focus and to expand our competitors — that our strategy and approach are their business. Since we have aligned our approach with non-competitive. Food safety and sustainability are key others in the Global Food Safety Initiative, we have principles in ensuring that we can feed an additional nine achieved a significant reduction of audits per site and billion people by 2050. How METRO GROUP addresses food improved the delivery of safe food. What advice would you give to Can you tell us about the innovative suppliers who are keen to work safety issues throughout its global solutions that METRO GROUP has with METRO GROUP? employed for food safety worldwide? supply chains I like to motivate partners in the supply chain to join multinational activities which support efficient We are running a global food safety system that focuses on the delivery of safe food to consumers worldwide. operations. We currently have 700 global certification BY Supplier certification by schemes that are accepted by programs with more or less the same purpose. Some the Global Food Safety Initiative (GFSI) is a key of our suppliers have been certified by five, ten or even Sarah Ockman aspect of this. We also recognize that it is difficult for fifteen of these programs. This is where I like to step Senior Operations Officer, Advisory Services, Europe and Central Asia, IFC many small farmers around the world to fulfil the GSFI in and say, ‘Please, let’s just aim for one solution. requirements. This led us to develop METRO’s It does not make any sense to invest in five or more Assessment Service program a couple of years ago, certification programs.’ • Read more of this interview online at www.sustainbusiness.org Interview with Hans Jürgen Matern, VP of Corporate Sustainability and Regulatory Affairs, METRO GROUP What guides METRO GROUP’s sustainability work? All our work rotates around the customer. “Customer centricity” is our main goal. At METRO GROUP we focus on safeguarding food supplies, conserving resources, About METRO GROUP and IFC and promoting sustainable production, taking into METRO Cash & Carry teamed up with IFC in 2010 to launch a new consideration demographic changes — all important program to help Ukrainian food producers learn about international best practices in food safety. The program was expanded to Kazakhstan in parameters in the retail sector. We aim to ensure that our 2012. Since 2009, IFC has also been promoting agribusiness standards customers, and their customers, get what they are expecting in Europe and Central Asia, in partnership with the Austrian Ministry of from us: fresh, safe, and sustainably produced food. Finance. As a result, investments in IFC’s client food producers in the region have risen by $156 million, while their sales and exports have increased by $173 million. All Photography: ©METRO GROUP 26 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  27 Cutting-edge solution: Focusing on R&D and having state-of-the-art laboratories that help the industry immediately ensure compliance with food safety regulations Beyond Safety Interview with Olivier Coppey, Executive Vice President for Agricultural Services, SGS Measures How would you describe the link between competitiveness and Our state-of-the-art laboratories help to ensure compliance with applicable regulations and our food safety response teams help the industry deal efficiently and safely with incidents where How SGS increases customer confidence and food safety? immediate action is needed to protect consumers. New certification schemes and analytical tests competitiveness through food safety standards are continuously being introduced. What is the biggest challenge you have observed in securing safe food and avoiding post-harvest waste - SAFETY SUSTAINABILITY and how can it be addressed? Infrastructure and logistics remain a challenge, QUALITY particularly in developing countries where a relatively large percentage of food products Safety, quality and sustainability are key drivers in are lost or damaged during transportation and the food value chain. Each of these elements impacts storage. In response to this situation and to the the marketability of food products and the efficiency changing food safety landscape, SGS has opened of their manufacturers or distributors. In addition its first integrated food safety and cold chain to being a legal obligation in the countries where facility in India. This is the first-of-its-kind in this the food is produced or sold, food safety has country for fresh produce, integrating traditional become a clear competitive advantage to increase inspection and testing with cold chain and customer confidence and open the doors to new post-harvest services like pre-cooling, ripening markets. Products that meet high quality and safety and safe storage at different temperatures. expectations also prevent costly recalls and protect brand reputation. What are the key trends in the food What kind of innovative solutions has safety space and how will they SGS used to improve food safety? affect the global food market in the future? SGS goes beyond the traditional inspection, testing, audit and certification of the food sector. Food in the future should be adequate, affordable, We start with the R&D of agricultural inputs at our sustainable and safe. Consumers would like to experimental research farms across the world. know where the food they eat comes from and Arable, dairy, fish, horticultural and livestock farmers how it has been produced on the farm. There trust our expertise to help them reduce risk in their is a growing demand for transparency and business activities, as well as to improve the quality traceability through the entire value chain. In an and safety of their products. It is all about making ideal world, consumers are able to scan QR codes the right choices, from field preparation and seed on food packaging in their favourite store with selection, through to crop monitoring. their smart phones and access an additional BY layer of information on the origin, safety and Ivan Ivanov Our technical solutions also include sustainability aspects of the food they buy. • Senior Agribusiness Specialist, identity preservation, traceability Read more of this interview online at Advisory Services, IFC www.sustainbusiness.org systems from farm to fork, food label reviews and nutritional analysis. 28 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  29 Cutting-edge solution: Tackling cocoa sustainability through a global partnership that unifies the supply chain What are the objectives of Cocoa Measurement and Progress (CocoaMAP) and how relevant is the program to IFC’s agribusiness clients? SF: CocoaMAP — a web based tool kit — was launched by WCF to grapple with the challenges of operating a more sustainable supply chain and to support a Cocoa ©World Cocoa Foundation closer collaboration in the cocoa industry through certain indicators and measurements. This year we focus on West-Africa (Ivory Coast and Ghana) to establish a framework of Key Performance Could you share one piece of Indicators (KPI’s) to help guide strategic activities advice that you feel is overlooked Collaboration and to measure the status of sustainability issues, including social, environmental, economic and in the industry? productivity topics. We have narrowed down a set of priorities around measures and performance BG: That there is power in working together. No one company alone can solve the problems; even the issues. Moving forward in 2014, 2015 and 2016 we industry alone can’t solve the problems. It’s also will start building a resource for information so important to work with governments on the that the industry — as well as IFC clients — can federal and local levels to find solutions. World Cocoa Foundation’s outlook gets draw on for sustainability issues. What is your vision for the future What has been the most important sweeter by taking a holistic view accomplishment of this effort? of the cocoa industry? BG: My wish is to see even better collaboration SF: First, consensus around measuring what matters among public and private sector partners in BY for industry partners. We have led discussions finding solutions to improving the livelihoods of around various frameworks of measurement, farmers in cocoa growing areas of the world. • Bruce Wise bringing in an industry perspective that was new Environmental, Social and Trade Standards Specialist, Advisory Services, IFC to certifiers, NGO’s and third parties. Second, www.worldcocoa.org CocoaMAP has developed a farmer information toolkit that is open-sourced and available to all Read more of this interview online at www.sustainbusiness.org ©World Cocoa Foundation companies, extension agents and governments to help with farm surveys, farm inventories and data collection. INTERVIEW WITH The World Cocoa Foundation (WCF) has Sourcing certified cocoa can lead to grown from a handful of large companies significant investments in certification. Bill Guyton President, World Cocoa Foundation into a diverse group of firms that represent What challenges do you see that could over 80% of the global cocoa market. How hinder the industry from reaching its important is this diversification? sustainability targets? Steve Farone BG: WCF has over 100 company members: about one-third BG: One of the biggest challenges we face are Business Manager, Cocoa Measurement and from Europe, another third from North America, the number of small scale farmers who work Progress Initiative, World Cocoa Foundation and the remaining from countries in Latin America, independently and who are not organized in ©Valentyn Volkov / shutterstock.com Africa and Asia. Our members are branded companies, cooperatives or groups. Another challenge processors, exporters, input suppliers, agri-dealers and is ensuring that farmers receive the right banks. This allows us to see supply chains from various inputs, including seeds and fertilizers, to perspectives and provides us with a more holistic view improve productivity. on how to tackle cocoa sustainability. 30 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / ensuring qualit y   May 2014  31 Cutting-edge solution: Leveraging big data and analytics to help companies stay one step ahead in managing water resources INNOVATING BY Richard Colback Agricultural Water Specialist, Advisory Services, IFC in Kenya Water is a subject at the core of productive and sustainable agribusiness. What, in your estimation, are the biggest IBM’s smart strategies challenges facing agribusiness today in terms of water for water management management? Excessive water withdrawals, inefficient water use and pollution are three of the biggest challenges facing agribusinesses today. The growing narrative and concern around water scarcity positions these issues as key challenges that can damage both the brand and profits. Environmental and social standards and the integration of agribusinesses into the community are incredibly important for IFC. One of the major reputational challenges that we face as a partner and investor has been around water. How do you see the work that you are currently involved in contributing to this? We leverage big data and analytics to help companies stay one step ahead in managing water-related risks. Agribusinesses need timely and flexible approaches to handle scarcity and rapid change — in either the environment or political and regulatory landscape. For example, we help farmers anticipate and respond to drought as well as evaluate and manage watershed vulnerability by informing them about the changes that are occurring in the water table, as adjustments occur due to a multitude of inflows and outflows. This approach relies heavily on being able to access and analyze Interview with Kala Fleming, accurate data from disbursed areas of land. We are also looking at Ph.D, Water Research Scientist, how our predictive analytics capabilities can drive the development IBM Research – Africa (pictured here) of more tailored insurance products for both small farmers and larger agribusinesses. All Photography: ©IBM Research 32 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / managing re s ource s   May 2014  33 ©Mutua Matheka H.E. the President of Kenya, Hon. Uhuru Kenyatta (left) and Dr. Kamal Charity Wayua, Research Scientist, Agriculture Lead Bhattacharya, Director IBM Research - Africa (right) inaugurate IBM’s first at IBM Research - Africa research laboratory in Africa (November 2013). It is a sobering fact that an estimated 50 How will you be able to deliver percent of water used for global agriculture these new capabilities? is wasted. How can agribusinesses better Many of the services for agribusinesses address water efficiency issues? we’ve discussed will be delivered via cloud, which as your readers know, is a new In water scarce regions, smart strategies for water management, consumption and delivery model inspired by such as precision agriculture can deliver significant competitive consumer internet services. IBM is the global advantage. For example, Sun World International, a mid-sized leader in cloud with an unmatched portfolio grower based in Bakersfield, CA, used IBM’s predictive analytics IBM scientists in Africa. From left to right Anne Onsarigo, Nathan Wangusi and Komminist Weldemariam. of open cloud solutions that help clients to to compare the costs of traditional and drip irrigation. The result think, build or tap into it. The increasing shift has been lower water usage and better nourished produce. across industries to cloud computing In the growing of table grapes, targeted use of drip irrigation is well-documented. Companies are achieving burden on water regulators who steward the resource. Imagine the Can predictive groundwater resulted in a 5% reduction in harvesting costs, a 20% reduction in competitive advantage by using software capability to snap a photo of a borehole rig in your neighborhood, and fuel usage and a 50% increase in yield over the past five years. analytics really help to turn the tide as a service (SaaS) to enhance customer automatically feed that information to a system that either confirms experience, increase collaboration, that the driller has been properly registered or immediately alerts and improve water use efficiency improve decision making, and increase the authorities. Illegal boreholes, indiscriminate dumping and and resource sustainability in operational efficiency. poorly treated wastewater threaten the health of all who rely on the water- scarce continents like Africa? resource. In Kenya, IBM is using big data Studies have shown that economic scarcity is much Results of applying smart water strategies in irrigation This ongoing effort to essentially crowd-source groundwater data more of a challenge than physical scarcity. So analytics to create a better can be incredibly helpful during droughts. Response times can be –5% water can usually be found, but the infrastructure understanding of water within reduced tremendously if the best locations for successful, emergency required to harness it effectively is often lacking. boreholes can be quickly identified. Ongoing monitoring and analysis REDUCTION networks, such as aquifers, that also supports early warning and alerting on the boreholes that are This certainly suggests the potential for technology IN HARVESTING COSTS to help bridge the infrastructure gap. are largely unseen. Could you at risk of running dry. In some situations, dry boreholes can spark tell us a little more about this conflict. Anticipating the locations of these hotspots and prioritizing What is your advice for project? And what role does IBM interventions can save lives. agribusinesses faced by the –20 see for itself in improving water % How could lessons learned in Africa be challenge of water management? use efficiency in Africa? taken to Asia? REDUCTION How do they access the integrated IN FUEL USAGE We’re exploring ways to use data on boreholes tools they need to monitor, manage The tools we are developing for Africa are directly applicable to and shallow wells gathered by others in the Asia. Across Asia, irrigated agriculture drives groundwater use. and anticipate the risks? water ecosystem (for example, borehole Bangladesh, for example, is reported to have more than one million service providers, government agencies, Embrace and leverage technology to stay ahead boreholes. India has more than 20 million with a new borehole of the game and give me a call if they need help +50 homeowners) to better understand the % sunk every six seconds on average. Groundwater management health and sustainability of groundwater doing that! • becomes even more complex when there is a high density of resources. We’re digitizing paper records INCREASE such as borehole completion reports and also extraction points withdrawing from the same source. The ability IN YIELD to get early warning alerts for quantity and quality become even developing new mobile apps that can be used more urgent in this setting. to infer borehole information. The approach we have taken allows average citizens to monitor levels and can reduce the 34 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / managing re s ource s   May 2014  35 Cutting-edge solution: Using remote sensing technology to trigger a revolution in global food production The gentle heartbeat of an oyster far away in the Southern Ocean could help unlock the key to the global challenges of food safety and security. The Data Sense-T is a program based in Tasmania, an island of about 500,000 people just off the southeastern corner of Australia. Here, a team of scientists, farmers and entrepreneurs based at the University of Tasmania are developing new sensing technology and business support tools that will forever change the way we grow food Revolution and derive value from nature’s resources. Early trials demonstrate that Sense-T can help – not only oyster ©Sense-T farmers — but all Tasmanian farmers monitor their crops, optimize productivity and efficiency, and minimize their environmental impact. Mike Buckby is a fifth generation Tasmanian farmer. He specializes in growing pasture for the region’s beef and dairy cattle and is participating in Sense-T trials. How Sense-T shakes up the “It’s not enough for me to know the weather across the whole region. I want to know the microclimates in each section of my ©Sense-T property and adjust how much water and fertilizer I use. I need business of agriculture in precision farming.” Current research projects are in beef, dairy, oysters and grapes, as well as projects Sense-T is collecting vast amounts of historical and real-time data. It looking at managing water resources and food supply chains. is integrating data from public and private sensors that are already Tasmania out there, as well as developing affordable, easy-to-use sensing tech- nology so people can invest in their own sensors. Scientists are, in turn, analyzing these real-time, sensor data flows to come up with models and algorithms that predict things like the rate BY of pasture growth, disease risks and when animals are in heat. These Megan Tudehope algorithms will then be fed into smart phone apps so farmers get 008 relevant alerts or calculations. Communications Manager, Sense-T Ultimately, Sense-T will generate apps for farmers that help to 007 optimize all aspects of their business, including production, animal health, environmental sustainability, freight, logistics and 006 marketing. Current research projects are in beef, dairy, oysters and 005 grapes, as well as projects looking at managing water resources and 003 food supply chains. 002 004 “The difference between Sense-T and other sensor developers or 001 research programs lies in its approach to creating a shared data resource that can benefit the whole community,” says Sense-T Director, Ros Harvey. So how does all of this on an island near the Antarctic help farmers in developing countries? It turns out that Tasmania is the perfect sample size to test these innovative methods and approaches and About Sense-T and IFC scale them in other parts of the world. • Sense-T is in dialogue with IFC and with some of the world’s leading food and beverage as well Sense-T is a partnership program between the University of Tasmania, CSIRO, as global ICT companies about ways to apply the Tasmanian Government and IBM. their sensor technology and data platforms to agribusiness and aqua culture projects in emerging markets. ©David Prince / offset.com 36 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / managing re s ource s   May 2014  37 Cutting-edge solution: Treating all water wasted during manufacturing and replenishing the water used in beverages back to communities and nature Water basins include the establishment of a freshwater reserve in East Africa, integrated pollution ©The Coca-Cola Company control techniques in China, improved livelihoods through better production in Blow-fill machines enable Coca-Cola to rinse pre-form bottles with air instead of Honduras, habitat restoration in Vietnam, and water before filling them. collaboration for the protection of the Danube Wonders River in Europe. In addition, we worked with What kind of innovative solutions has Coca-Cola used to Bonsucro to develop certification standards manage water more efficiently? for growing and milling sugarcane more sustainably—Coca-Cola was the first to At Coca-Cola, we set a goal to ‘balance’ an amount of water purchase certified sugar in 2011. equivalent to what we use in our beverages and their production by 2020. To achieve this goal we are improving our water-use efficiency; What advice can you give to agribusiness treating all wastewater from our manufacturing processes; and companies that wish to use water more replenishing the water used in our finished beverages back to sustainably and efficiently? communities and nature. How Coca-Cola’s efficient use of water contributes to We are also focusing innovative water stewardship efforts on our agricultural supply chain. In partnership with Cargill Incorporated While it may sound simplistic, a good starting point is to measure how much water you use. 1 BILLION and WWF, for instance, we are working in Jilin Province, China, on You can’t plan for improvements without a $ a sustainable corn project intended to improve the livelihoods of baseline. Next, work to eliminate wasted farmers and protect biodiversity by increasing yields, reducing waste, water by improving the efficiency of irrigation. conserving water, and protecting wetlands. In India, we are working Then, determine the sustainability limits of with Jain Irrigation to promote sustainable mango production. your water sources, and question whether your withdrawals are more than nature can replenish How have these solutions affected the company’s profits? and adjust accordingly. Lastly, work to reduce pollution impacts from water runoff picking IN PRODUCTIVITY SAVINGS Innovative solutions have helped Coca-Cola avoid costs by reducing the amount of water used and discharged. And, up agrichemicals.   water efficiency activities are often coupled with energy efficiency How has your participation in the 2030 improvements, which amplify the savings. These efforts are part while improving millions of lives and the environment of an expanded productivity and reinvestment program aimed to Water Resources Group affected the way you do business? generate an incremental $1 billion in productivity savings by 2016. As a founding member, we are collectively working with our partners, including IFC, to improve While it may sound simplistic, a good water policy around the world—engaging in starting point is to measure how much country-level policy discussions with a diverse WATER PROJECTS IN ACCESS TO SAFE WATER PROVIDED FOR group of stakeholders. In South Africa, for water you use. You can’t plan for 468 COMMUNITIES 800,000 PEOPLE example, which is anticipated to face a 17% water improvements without a baseline. demand-supply gap by 2030, WRG has helped foster a cross-sector collaboration to support the South African government’s water strategy. What impact have your activities around water had on the By addressing water stewardship in the context ACCESS TO SAFE WATER IN INITIATIVES HAVE BENEFITTED environment and on communities? of the “water-energy-food nexus,” many of our 33/58 AFRICAN NATIONS 1.82 MILLION PEOPLE Since 2005, through 468 community water partnership projects, our initiatives for improving water access and sanitation alone are water projects are already helping communities by focusing on increasing crop yields while reducing the impacts on water sources through water body estimated to have benefitted more than 1.82 million people. Our alterations, aquifer recharge, rainwater harvesting Replenish Africa Initiative (RAIN), which aims to provide 2 million and more. • people with safe water access across Africa by 2015, has provided Interview with Greg Koch, access to safe water for approximately 800,000 people in 33 of About The Coca-Cola Company and IFC Director, Global Water Stewardship, Africa’s 58 nations. It has helped replenish more than 1.3 billion IFC is partnering with The Coca-Cola Company on investments The Coca-Cola Company liters of water and improve 1,600 communities. made in bottling companies around the world and on strategic themes such as water, sustainable sourcing, food safety, With WWF, we have been working to conserve freshwater resources women’s empowerment, and resource efficiency. around the world. Some major conservation gains in freshwater 38 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / managing re s ource s   May 2014  39 Cutting-edge solution: Processing water waste to create an organic fertilizer that improves soil conditions and enhances productivity In the West Bank, one of the world’s most arid regions, transformative agricultural An Olive Branch practices are urgently needed by hundreds of thousands of farmers dependent on their lands for their livelihoods. in the West Bank For those working in olive oil production — a centuries-old mainstay of the local economy — safe and successful use of waste water from olive pressing is a welcome improvement. Olives, and the oil that they produce, constitute an essential source of income for as many as 100,000 families in the West © veer.com Bank. However, the olive oil production process frequently UNEP & IFC on how a water waste problem becomes involves hefty volumes of untreated liquid waste seeping into Ecological Footprint groundwater tables and public sewage facilities. This waste its own solution can contaminate aquifers and neighboring fields and can cause The use of treated waste water as compost can also damage to sewage systems and waste water treatment plants. help improve soil conditions in the West Bank’s lush olive fields and enhance productivity, offering both a safe and natural substitute for chemically synthetized fertilizers and helping improve the sector’s ecological footprint. The compost is obtained by modifying the oil extraction process and letting the waste undergo a natural process of maturation during a six-month period. For small and medium enterprises involved in the pressing and bottling of olive oil, that intervention has helped their businesses eliminate a toxic material ©Ocean Photography / veer.com and prevented it from polluting neighboring fields. As firms globally sell products Under the “West Bank Olive Oil Export Development” labelled as green and fair trade, project, IFC partnered with the United Nations Environment organic fertilization can help in Programme’s (UNEP) Sustainable Consumption and the certification of exported goods. Production/Regional Activity Center (SCP/RAC) to provide olive oil farmers and small and medium enterprises with Further, the application of compost as a natural modernized practices to minimize the potential environmental alternative can help increase the input of organic impacts of the olive oil industry. carbon in soils, acting as a climate change mitigation measure. By conducting certain modifications in olive pressing processing, the practice creates a single waste that can be At a time when the world is facing enormous water composted and used later on as an organic fertilizer, thus scarcity challenges and prices of chemical fertilizer eliminating the problems associated with waste water. have increased, these alternative solutions for cash-strapped farmers and for those working The use of this organic fertilizer mitigates the effects of in agribusiness, are celebrated as a refreshing chemical fertilization, a source of nitrate pollution whose long BY bout — of good news. term use has intensified soil erosion and desertification across the region. Regionally, olive oil is a key sector in Morocco and Frederic Gallo Hazem Hanbal Tunisia, but this innovative solution can be replicated Agribusiness Specialist, Advisory Services, across fields where the traditional olive pressing Chemical Engineer, Sustainable Consumption Middle East and North Africa, IFC and Production Center (SCP/RAC) of the process remains largely intact. Lessons learned in the Mediterranean Action Plan (UNEP/MAP), an West Bank, where agribusiness accounts for about intergovernmental organization of the United two-thirds of total employment, are transferrable Nations Environment Program elsewhere, a testament to the fact that in recycling waste, we are often recreating value. • 40 SUSTAIN: Cutting-edge business solutions I. BUSINE S S S OLU T ION S / managing re s ource s   May 2014  41 Country Spotlight Open for agribusiness BY Vikram Kumar Resident Representative in Myanmar, IFC ©Peter Adams / offset.com 42 SUSTAIN: Cutting-edge business solutions ii. c ountry sp otligh t / m yanmar   May 2014  43 Once one of the most isolated countries Fast Facts: in the world, Myanmar, in the wake of According to the Myanmar government, > the agricultural sector constitutes 41% of political and economic reform is now the country’s total GDP and 11% of foreign exchange earnings. fully open for business. >  yanmar is resource-rich M with a strong agriculture Under the current leadership of former roads, airports, communications and base in rice, pulses, beans, ©Tun Lynn general President Thein Sein, Myanmar’s electricity — are woefully inadequate maize, sesame, rubber, new government has pledged a democratic and compromise market access, sugarcane, jute, wheat and transition anchored on economic reform distribution and competitiveness. hardwood and is backed and foreign investment. Critical to that process will be a strong focus on The most recent edition of the World Bank’s annual “Doing farmers a range of market barriers including by a strong agricultural agribusiness investments. Business” report rated Myanmar 182 out of 189 economies in a lack of knowledge and tools for efficient processing industry. production, as well as a lack of technology to relation to the ease of opening and running business ventures. support agricultural processes, ensures that Growth areas in the agricultural sector > Bordered by dense forests and plateaus In October 2013, the World Bank projected Myanmar’s economy to the quality and quantity of their yields remain include rice, horticulture, pulses, animal and rich in fertile valleys and deltas, grow to 6.8% in 2013/14 but raised concerns about inflation, which low. Many rural youths have left the sector protein, dairy and coffee. As pesticides and Myanmar has long caught the attention of hit 7.3% last year. fertilizers are not in widespread use, there altogether in search for better-paid jobs in global agribusiness companies who are is a potential niche production area for urban areas or abroad. keen to draw profits from the country’s Living in Myanmar and working closely with my World Bank organic goods. vast natural resources. colleagues, I have identified four central challenges to agribusiness 70 The overall picture may look sobering for According to the United Nations, over 80% > foreign investment: foreign agribusiness companies looking % of Myanmar’s population are subsistence In a country where to invest in Myanmar but there is potential farmers and live on $2 or less per day. close to 70% of the Despite the government’s renewed focus on agriculture, the issue given the country’s resources and favorable population live in of land access and land grabbing is of paramount concern. Two geographic location. rural areas, the recent bills designed to alleviate the problem of land grabbing — agribusiness sector is a the Farmland Law and the Vacant, Fallow and Virgin Lands critical driver of growth of the population Management Law — may actually complicate the problem. The In 2013 Coca-Cola Co. and Unilever both live in rural areas pledged investments of nearly $1 billion with rural development Farmland Law passed in March 2012, for example, permits the in Myanmar for the next decade, becoming and agribusiness poised transfer and mortgaging of tillage rights but also gives the state the first prominent companies to start to potentially lift millions of ultimate ownership and control of all agricultural land. manufacturing in the country and making Myanmar citizens out of extreme poverty. the biggest commitments yet by Western ©Galyna Andrushko / veer.com Access to finance for farmers is severely limited with only one multinational corporations. But despite new opportunities for economic financial institution, the Myanmar Agricultural Development Bank, growth, both the government and foreign operating in the rural space. Informal loans to farmers carry To create capacity for local agribusiness companies in Myanmar, In March of this year, Singapore-listed Yoma investors recognize that many challenges monthly interest rates between 5% to 10%. Myanmar’s strong IFC is also trying to link them with international players who have Strategic Holdings (YSH), announced plans still stand in the way. As part of the IFC currency has pushed up the cost of basic inputs such as seeds the right technical experience and are willing to invest risk capital to expand into Myanmar, investing a total team tasked with unleashing private sector and fertilizers but reduced the revenue from rice sales. Many of in the country. Opportunities are tremendous across the entire of $130 million into education, coffee, dairy potential in Myanmar, I see firsthand every Myanmar’s farmers are now locked in a vicious cycle of debt value chain, particularly in providing quality agri inputs. products, cold storage and logistics. YSH is day the roadblocks to market liberalization following drought and flooding. looking to secure a financing package for this and agricultural reform. And despite communications challenges, there is also an venture from IFC, subject to IFC’s detailed For foreign companies hoping to invest in Myanmar, finding opportunity to use digital technology to get real time information due diligence including an environmental Decades of mismanagement have led to a reputable Myanmar sponsor is critical. Although Myanmar is about weather and commodity pricing to farmers — an innovation and social impact assessment. crumbling infrastructure, mass poverty and now party to several international agreements, including the New that could potentially revolutionize productivity while maximizing low rates of literacy. Basic infrastructure — York arbitration convention, foreign investment is still challenging. rural incomes for years to come. Steps continue to be taken to enhance investor protection, including the implementation of a new foreign investment law in July 2012. In 2013, Coca-Cola and Unilever For agribusinesses seeking to invest in Myanmar there is a delicate Currently IFC is looking to merge this new law with an existing both pledged investments of nearly path to tread — ensuring that they access this once isolated market domestic citizen law that would create one central legal investment in an ethical and inclusive way while maximizing the positive framework while maintaining a level playing field for both domestic benefits for a population mired in poverty. With parliamentary 1 and foreign investors. elections looming in 2015, all eyes will be on Myanmar’s $ commitment to the democratic process. Foreign investment will For the vast bulk of families who are living below the poverty line, undoubtedly go hand-in-hand with the country’s tenuous political ©Kyaw Soe Lynn agriculture is their primary source of income. But for many of these BILLION process. • 44 SUSTAIN: Cutting-edge business solutions Ii. c ountry sp otlight / m yanmar   May 2014  45 5.7 Networks $ BILLION What would you say to How a World Economic Forum someone who might think GENERATED IN PRIVATE SECTOR COMMITMENTS “shouldn’t big companies platform builds partnerships that already be addressing can drive the future of agribusiness $ 100 MILLION INVESTED ON THE GROUND these challenges?” When we started this work, many companies were already undertaking their own sustainability initiatives. But there are real limitations to what BENEFITING BY one single company — or even the entire private 1 MILLION sector — can do. What’s needed is coordinated, Gene Moses collective action among all stakeholders to Senior Strategist, Agribusiness & Forestry, FARMERS achieve shared goals. Investment Services, IFC Where do you go from here? What do you offer that There are two really exciting efforts that we is different? will be announcing in 2014. Following the rapid development of the Grow Africa partnership, which We work with leaders of all sectors and regions, the NVA catalyzed together with the African Union so that we can help put critical items on the agenda and NEPAD, our partners in Southeast Asia said, and facilitate commitment and action at a high level. ‘Why don’t we do that here?’ We’re delighted to say We can help to bring the private sector to the table that a new regional platform called Grow Asia will as a constructive partner in helping address some be launched later this year. of these issues. The fact that we are a neutral and informal platform means that we can offer a “safe The other effort is our Transformation Leaders space” for open discussion about common Network, a community of senior practitioners challenges and obstacles. and partnership leaders from all regions and stakeholder sectors who will be exchanging best practices and experiences. All of these partnership What has been your approach? approaches are very new — there’s no preexisting roadmap or recipe for success — so everyone is Market-based approaches can be an important inventing and innovating as they go along. By tool to achieving our vision and implementing these learning from each other’s successes and failures approaches often requires collaboration between we can help speed the progress of the whole different stakeholders. The private sector has network that shares this common agenda. • enormous capacity to develop and efficiently scale Interview with Lisa Dreier What is the “New Vision for innovative business models — especially in the Visit www.sustainbusiness.org to read more, watch a video and download related reports. Agriculture?” Senior Director, Food Security developing world — and can deliver real benefits and Development Initiatives, in terms of farmers’ incomes and market access, World Economic Forum, USA sustainability and productivity. (pictured here) The New Vision for Agriculture (NVA) is a global initiative of the World Economic How far have you come? Forum which began in 2009 and has We are now working with 14 different countries developed quickly to become a dynamic in Africa, Asia and Latin America, anchoring platform for catalyzing and supporting efforts around each country’s vision for its partnerships in the agriculture sector. agricultural sector. We serve as a platform to facilitate co-investment and collaboration between NVA aims to bring together the public and private sectors key stakeholders including the government, in a more coordinated way to develop agriculture in a more private sector, farmers associations, donor and sustainable, inclusive and productive manner. The initiative international agencies, and civil society. To date, this was prompted by our stakeholders’ recognition that the activity has generated over $5.7 billion in private world was not on track to face the enormous challenge of sector investment commitments, of which about sustainably feeding 9 billion people by 2050. $100 million has been implemented on the ground so All Photography: ©World Economic Forum far, benefiting over a million farmers. 46 SUSTAIN: Cutting-edge business solutions iii. knowl edge hub / ne tworks   May 2014  47 Academia UC Davis, Defining and measuring sustainability through the food lens The definition of sustainability used by many seems simple enough: one of the world’s development that meets the needs of the present without compromising the ability of future generations to leading agricultural meet their own needs. This familiar quote from the 1986 Brundtland report, Our Common Future, universities, on the is useful as a visionary statement, but provides little guidance on how to assess sustainability, much less how to achieve sustainable development. And since sustainable development is multi- global food system dimensional — comprising complex combinations and interactions across economic, social, and environmental issues — the operational challenges become apparent: What is the minimum list of issues that have to be addressed to back up a comprehensive claim of sustainability? Is there just one list? If so, what are the BY issues that must be on the list? How can those issues be measured to benchmark Tom Tomich Courtney Riggle progress so that sustainable development Founding Director* Sustainable Sourcing of Global is recognizable when it is achieved? Agricultural Raw Materials* How can we identify, build consensus, and balance tough tradeoffs? And how can we adapt strategies and practices in a rapidly Aubrey White changing world? Such a comprehensive, Communications Manager* practical, and universally-accepted sustainability framework is an urgent need — let us hope its realization is only a few years away. *Affiliation: Agricultural Sustainability Institute, University of California, Davis, CA USA In the meantime, the global food system is one of many lenses through which one can usefully view the practical challenges of sustainable development; specifically how to enable our growing human population to feed itself. ©Jay Erker 48 SUSTAIN: Cutting-edge business solutions iii. knowl edge hub / academia   May 2014  49 of managerial controls and engineering solutions into a chaotic realm. Self-organizing social and ecological systems interact to produce “rules” of their own, and can adapt in perverse ways to even the best intentions. This holds implications not just for procurement and manufacturing, but also for corporate strategy, capital investment, organizational design, branding, and even the viability of existing business models. Rather than trying to “administer” or “engineer” the food system, efforts to advance sustainability require “uncommon collaborations” involving businesses, governments and other public institutions, civil society organizations, and farming communities across our planet. ©Agricultural Sustainability Institute at UC Davis Why information technology matters Fortunately, there is good news from the information technology sector, which is undergoing a revolution in availability of huge datasets of heretofore unimagined timeliness and complexity. ©Agricultural Sustainability Institute at UC Davis Ongoing work at the Agricultural Sustainability Institute and the Information Center for the Environment at the University of California at Davis is but one of many contrasting efforts underway ©Agricultural Sustainability Institute at UC Davis The social footprint of the food system is indisputable: food to develop informatics applications for food system sustainability. is fundamental for human wellbeing, economic prosperity, In collaboration with food companies and other partners, our Over the past 15-20 years, advances in remote sensing and other data sources social stability, and cultural interaction. Over the past 15-20 approach seeks to provide coherence through an integrated, Analyzing sensor data also have established beyond doubt that years, advances in remote sensing and other data sources open-source platform. the food system has a huge and growing from oysters uncovers also have established beyond doubt that the food system environmental footprint. valuable information > has a huge and growing environmental footprint. Major Rather than a single fixed list of sustainability issues and indicators, roles in land cover change and biodiversity, climate forcing, our computable prototypes can be viewed as a “sustainability checklist “Even perfection energy, and freshwater, nitrogen and phosphorous cycles, to name a few, place the food system in the center of debates generator” that can be used for any agricultural commodity produced anywhere on land. in attaining about potential impacts on planetary boundaries and vulnerabilities as boundaries are exceeded. While three or four indicators sustainability will not be sufficient, our prototypes suggest that Why food challenges extend beyond factory walls * The authors are members of a large team targets on-site frameworks can be quite working on sustainable sourcing at UC Davis. Food manufacturers and processors — and commodity tractable: 15-20 indicators may Their work has been funded by a major grant traders, financiers, risk managers, and other agribusiness be suitable for food system from Mars, Incorporated. Project information (for example, enterprises — operate within this intersection of impacts sustainability assessment in and results can be viewed at www.asi.ucdavis.edu. Opinions expressed here are those of the authors and vulnerabilities. Data still are limited, but food companies specific contexts. retrofitting for alone, not the University of California or undertaking evidence-based sustainability efforts are likely Mars Incorporated. We believe these information to find that their challenges extend far beyond factory walls. greater efficiency An internal assessment by Mars, Incorporated, for example, showed on-site greenhouse gas emissions were only 6% ©Jay Erker technology applications can help food companies clarify in energy or water impact mitigation priorities, of the total emissions over the complete product life cycle, identify supply chain vulnerabilities, and benchmark progress while well over half of emissions arose upstream in the About the Agricultural Sustainability use) may have toward sustainability goals that matter for everyone. Moreover, supply chain. This result is daunting: even perfection in Institute at UC Davis the intersection of sustainability impacts and vulnerabilities attaining sustainability targets on-site (for example, The Agricultural Sustainability Institute at also may hold tangible opportunities for firms to enhance only a small UC Davis works to ensure access to healthy retrofitting for greater efficiency in energy or water use) competitive advantage, from recruiting and retaining leaders food and to promote the vitality of agriculture may have only a small effect overall. today and for future generations. We do this who are motivated by sustainability concerns to enhancing brand effect overall.“ Moreover, supply chain vulnerabilities also remain unaddressed if focus remains within factory walls. Droughts loyalty among consumers through verifiable sustainability claims. through integrative research, education, communication, and early action on big, For centuries, business models in the food sector have guarded emerging issues. ASI is part of the University and floods, pests and diseases, and economic and political proprietary information to secure profits from thin margins. of California at Davis, ranked as the No. 1 upheavals threaten the livelihoods of agricultural producers Perhaps a transparent new “open source” food business model school in the world for teaching and research in agriculture and forestry. and access to raw materials that keep global food will emerge — mashing up food manufacturing, marketing, risk businesses humming. management, and information technology — to harness “big data” Following this trail in the search for sustainability solutions to inform sustainability strategies and enhance consumer appeal necessarily takes firms far from familiar home turf through evidence-based sustainability branding. • 50 SUSTAIN: Cutting-edge business solutions iii. knowledge hub / academia   May 2014  51 Communications What is the biggest challenge you A Financial Times reporter’s view on think agribusiness faces today? how to tell the sustainability story Researching my book Moveable Feasts: From Ancient Rome to the 21st Century, The Incredible Journeys of the Food We Eat and why it matters gave me a sense of just how old the world’s food supply chains are. As I discovered, from the ancient spice routes to the vast West Africa. global trade activities of the British Empire, food has long traveled vast distances from producers to markets and BY consumers. In Rome, it was amazing to stand on top of Monte Social Media Testaccio and learn that this hill is made entirely from millions Emmanouela (Emmy) Markoglou of broken pots discarded from a giant food commodities trade Communications Officer, Advisory Services, IFC that operated during the first and second centuries when olive “Mixing It Up” blog oil traveled from southern Spain to Italy and across the Roman This blog was launched by Sarah Empire. Then, the challenge was coming up with the right Murray in April 2014 and features transport technologies (in this case, the amphora, a large, thought provoking views on business, sturdy ceramic pot). society and the environment. Today, the challenges facing agribusinesses are very different. It presents interviews with CEOs, There is now enormous pressure to find ways of managing academics, policymakers, social the social and environmental footprint of agribusiness. First, entrepreneurs, authors and consumers and buyers increasingly care about where their others, on innovations and new food and agricultural products come from. And companies business models that transform are beginning to see the benefits of sustainable agriculture — our world and the way we in terms of being able to reduce risks such as shortages of consume natural resources. water and, on the social side, being able to create a more robust supply chain by helping small farmers improve the efficiency www.sarahmurray.info/blog of their farms. Can you share an example of an “Guardian Sustainable Business” blog agribusiness company that led This blog features the views of Hanoi, Vietnam. Rajasthan, India. a successful campaign around leading sustainability experts and showcases best practice sustainability? in corporate sustainability. Interview with Sarah Murray What were the criteria for the In the UK, the “Behind the Label” campaign launched by It also offers ‘Business Shorts,’ Specialist writer on corporate responsibility and environmental selection of private sector success Marks & Spencer a few years ago is a good example of this. a series of half-day courses on communications, tailored to stories you featured in The campaign, which provided information about the way sustainability, long-time Financial its products (ranging from clothing to food) are sourced, sustainability professionals. Times contributor, and former sustainability reports you wrote was well-regarded and popular with customers. www.theguardian.com/sustainable-business FT staff journalist for the FT and other media? Is there any advice you could give Agribusiness is a vast global industry with one of the world’s heaviest environmental footprints, from water consumption to the to a small agribusiness company pollution resulting from agricultural runoff. Agribusiness has a social that wishes to pro-actively raise footprint, too, since small farmers, as suppliers, play a critical its visibility? role in strengthening food security. In coming up with story ideas for the FT World Food reports, I tried to reflect these themes, If a company can provide real, honest insights into the with features that ranged from Harvey Morris’s piece on private challenges it has faced, as well as its successes, this would sector initiatives helping to fight poverty to Clive Cookson’s feature catch the attention of the media. It’s also important to make looking at advances in fertilizers and pesticides and a piece I wrote stories “real” — to connect agribusiness to people’s lives, the on how companies are providing agricultural extension services food they eat, or, in the case of farmers, how they support to small farmers, giving them advice and assistance on their families. everything from fertilizer use to accessing agricultural All Photography: Sarah Murray commodities markets. Read more of this interview online at www.sustainbusiness.org 52 SUSTAIN: Cutting-edge business solutions iii. knowl edge hub / c ommunications   May 2014  53 Publications World Bank Group Reports and Tools Working with Smallholders: Good Practice Handbook: Investing in Agribusiness: Other Sustainability Reports A Handbook for Firms Building Assessing and Managing Environmental and Social A Retrospective View of a Development Bank’s Sustainable Supply Chains Risks in an Agro-Commodity Supply Chain Investments in Agribusiness in Africa and Southeast Asia and the Pacific Contributed by Alan Johnson Contributed by Louis-Philippe Mousseau Senior Agribusiness Specialist, Sector Lead, Agribusiness & Forestry, IFC Advisory Services, IFC Contributed by Grahame Dixie Agribusiness Adviser, World Bank The future of agriculture depends in large part Companies increasingly understand that managing social on innovative solutions emerging from private and environmental risks is fundamental to success and This study analyzes the experience of the Commonwealth firms. It also depends on new and innovative market access. IFC recently published a Handbook to offer Development Corporation (CDC) as an investor in commercial partnerships between different stakeholders its agribusiness clients practical advice for managing these smallholder and estate agriculture and agro-processing in the food system. IFC, in addition to increasing risks. This new tool unlocks the “how to” on supply chain in Sub-Saharan Africa and Southeast Asia and the Pacific its programs and investments in agriculture, mapping and risk categorization of suppliers, and provides between 1948 and 2000. Analysis of the data was undertaken is scaling up programs that improve the crucial support to regional traders and processors in to determine whether success and failure can be correlated livelihoods of small farmers by linking them to understanding IFC’s supply chain requirements as reflected to any critical factors. This has brought into the public domain modern supply chains providing opportunities in IFC’s Performance Standards. a number of hitherto hidden insights about the ground realties to increase their productivity and improve their of these investments. farming practices. IFC will be offering interactive webinars and workshops to drill down on specific areas of interest. This review of CDC agribusiness investments corroborates the IFC recently published a handbook for firms who view that agribusiness investments are risky, particularly when wish to expand their supply chains by working For agricultural companies, managing the potential impact the investment is in a start-up. While only one fifth of projects with small farmers. The handbook aims to enable of their activities is an immense challenge, given this were rated complete failures, one third of equity investments more productive interactions between private industry’s use of land and water and its economic generated at least moderately attractive internal rates of firms and small farmers. It is designed significance to poor and vulnerable people. Effectively return, and overall about 55% resulted in financially viable as an overview of key topics for sustainability managing these risks means that agribusinesses must projects. The majority of projects in both Asia and Africa ended and supply chain managers at agribusinesses, identify not only the risks of their direct activities, but also up being sustainable businesses that delivered broadly the plantation companies, and extractives. the risks inherent in supply chains for the agro-commodities number of jobs and level of turnover that had initially It covers a broad range of topics including they need. been anticipated. farmer aggregation, training and communication Another IFC tool, the Global Map of Environmental strategies, standards and certification, access to The analysis of CDC’s agribusiness portfolio demonstrates and Social Risks in Agro-Commodity Production inputs, farm management, the role of women in both historical potential and pitfalls and illustrates the need to (GMAP), has supported IFC business development with supply chains, and measuring results. continuously adapt and innovate to achieve both political and agro-commodity traders and trade finance. It presents commercial sustainability. The Handbook can be accessed through a new a database of 150 country-commodity combinations IFC website, www.farms2firms.org, which aims (e.g., Brazil/soy, Ghana/cocoa, Vietnam/coffee), using a Another new joint study by the World Bank and UNCTAD to bring together firms and service providers methodology aligned to IFC’s Performance Standards. entitled The Practice of Responsible Investment Principles interested in small farmer supply chains. It also It aims to facilitate financing decisions by assigning a in Larger Scale Agricultural Investments: Implications for presents related activities and events, including color-coded risk score to each country-commodity Corporate Performance and Impact on Local Communities uses IFC’s past and upcoming roundtables on combination. It can be accessed at www.ifc.org/gmap. a sample of 39 mature agribusiness investments in Asia small farmer engagement. and Africa, plus interviews with over 500 people from the Find these reports at www.ifc.org/sustainability communities surrounding these businesses. It paints a nuanced picture of their perception of upsides and downsides of agribusiness. It also responds to the demand by investors and Governments for best practices and the pitfalls to avoid. The report’s evidence-based recommendations ultimately will help provide fairer and better outcomes for all. Find out more at www.openknowledge.worldbank.org 54 SUSTAIN: Cutting-edge business solutions iii. knowl edge hub / publications   May 2014  55 Publications Other Reports The UN Global Compact-Accenture CEO Post-green revolution food systems and the triple Study on Sustainability 2013 burden of malnutrition This study presents findings from the world’s largest By Gómez, Miguel I.; Barrett, Christopher B.; Raney, CEO study on sustainability to date. More than Terri; Pinstrup-Andersen, Per; Meerman, Janice 1,000 top executives from 27 industries across 103 countries assess the past, present and future Changes in food systems and in the understanding of of sustainable business; discuss a new global the global malnutrition challenge necessitate fresh 87% of CEOs believe that  the sustainability architecture to unlock the full potential of business thinking about food systems-based strategies to reduce reputation of their company is important in contributing to global priorities; and reveal how malnutrition. This paper introduces a special section that to customers’ purchasing decisions leading companies are adopting innovative offers such new perspectives. It discusses trends with strategies to combine impact and value creation. respect to indicators of the triple burden of malnutrition to understand the extent of global malnutrition challenges and then relate those to food systems transformation in developing countries. Catalyzing Smallholder Agricultural Finance Published by Dalberg Global Development Advisors This report aims to inform investors, multinational 97% of CEOs see sustainability as important commodity buyers, and donors on how to deploy capital  their business to the future success of  in a way that will strengthen small farms. A directional estimate suggests global demand for small farmer agricultural finance could be as large as $450 billion. This report leverages the experience and insights of an advisory committee that included Root Capital, Technoserve, and ANDE, plus interviews with over 65 commodity buyers, investors and value chain experts. The New Harvest: Agricultural Innovation in Africa By Calestous Juma This report integrates research and policy ideas from an international panel of some of the most influential thinkers on agricultural development. It presents enactable policy ideas for advancing agri- culture throughout Africa, at the national and region- al levels. It includes a wealth of case study material from Green Revolution and educational initiatives in India, China, and throughout Latin America. It is authored by C. Juma, a professor of the Practice of International Development and faculty chair of Innovation for Economic Development Program at Harvard Kennedy School. 56 SUSTAIN: Cutting-edge business solutions iii. knowl edge hub / publications   May 2014  57 Special thanks to our contributors from private sector companies, international organizations and academia Olivier Coppey Hans-Jürgen Matern Fiona Wheatley Executive Vice President for Agricultural VP of Corporate Sustainability and Sustainable Development Manager, Services, SGS Regulatory Affairs, METRO GROUP Marks and Spencer Lisa Dreier Sarah Murray Birgitt Walz-Tylla Senior Director, Food Security Specialist writer on corporate Head of Sustainability, and Development Initiatives, responsibility and environmental Bayer CropScience World Economic Forum (WEF) USA sustainability, long-time Financial Times contributor, and former FT staff journalist Aubrey White Kala Fleming Communications Manager, Agricultural Water Research Scientist, Courtney Riggle Sustainability Institute, University IBM Research, Africa Sustainable Sourcing of Global of California at Davis Agricultural Raw Materials, Agricultural Sustainability Institute, University of Steve Farone California at Davis Business Manager, Cocoa Measurement and Progress Initiative, World Cocoa Foundation Howard-Yana Shapiro Chief Agricultural Officer, Mars, Incorporated; Senior Fellow at the Frederic Gallo College of Agriculture & Environmental Chemical Engineer, Sustainable Sciences, at the University of California Consumption and Production Center at Davis; Distinguished Fellow at (SCP/RAC) of the Mediterranean Action the World Agroforestry Centre Plan (UNEP/MAP), an intergovernmental in Nairobi, Kenya organization of the United Nations Environment Program Tom Tomich Founding Director, Agricultural William P. (Bill) Guyton Sustainability Institute, University of President, World Cocoa Foundation California at Davis, Inaugural Holder of the WK Kellogg Endowed Chair in Sustainable Food Systems Gregory J. Koch Megan Tudehope Director, Global Water Stewardship, Communications Manager, Sense-T The Coca-Cola Company Photo by Brad Roberts, IFC 58 SUSTAIN: Cutting-edge business solutions Special thanks to all our contributors DISCLAIMER from the World Bank Group This journal was commissioned by IFC, a member of the World Bank Group. The conclusions and judgments contained in this report should not be attributed to, and do not necessarily represent the Richard Colback Alan Johnson Caitriona Palmer views of, IFC or its Board of Directors or Agricultural Water Specialist, Senior Agribusiness Specialist, Communications Consultant, the World Bank or its Executive Directors, Advisory Services, IFC Advisory Services, IFC Advisory Services, IFC or the countries they represent. IFC and the World Bank do not guarantee the Ian Crosby Brad Roberts accuracy of the data in this publication Manager, Advisory Services, Henriette Kolb Agribusiness Specialist, and accept no responsibility for any East Asia and the Pacific, IFC Head, Gender Secretariat, IFC Advisory Services, IFC consequences of their use. Kate Bottriell Oksana Varodi Environmental and Social Standards Vikram Kumar Senior Agribusiness Officer & Program Specialist, Advisory Services, IFC Resident Representative in Myanmar, IFC Manager, Advisory Services, Europe and Central Asia, IFC Daniel James Crabtree Head, Advisory Services, IFC Ivan Ivanov Bruce Wise Senior Agribusiness Specialist, Environmental, Social and Trade Advisory Services, IFC Standards Specialist, Advisory Services, IFC Grahame Dixie Agribusiness Adviser, World Bank Emmanouela (Emmy) Markoglou Communications Officer, Advisory Services, IFC Juan Gonzalo Flores Senior Investment Officer, Gene Moses Agribusiness & Forestry, Senior Strategist, Agribusiness & Visit our website to read the bios of our Investment Services, Latin Forestry, Investment Services, IFC contributors and use our skill finder to America and the Caribbean, IFC identify different areas of expertise: Hazem Hanbal Louis-Philippe Mousseau www.sustainbusiness.org Agribusiness Specialist, Advisory Sector Lead, Agribusiness & Forestry, IFC Services, Middle East and North Africa, IFC Anup Jagwani Sarah Ockman Principal Investment Officer, Senior Operations Officer, Advisory Agribusiness & Forestry, Services, Europe and Central Asia, IFC Investment Services, IFC Photo by Brad Roberts, IFC 60 SUSTAIN: Cutting-edge business solutions Cutting-Edge Business Solutions IFC Advisory Services 2121 Pennsylvania Ave., NW Washington, DC 20433, USA AskSustainability@ifc.org www.sustainbusiness.org