Ores mined in war zones have long been subject to heightened attention when it comes to sustainability and reputational risks. Yet in 2022, it is the production and sourcing of ‘soft’ commodities, such as wheat, that are increasingly under scrutiny.
As the conflict in Ukraine continues to escalate, the impacts on sustainable development become more pronounced and the vulnerabilities in global food supply chains increase. Almost half of the world’s calorie intake is derived from essential crops, such as maize, rice, and wheat and, according to World Bank analysis, Ukraine and Russia account for 29 per cent of global wheat exports and 17.4 per cent of the world trade in maize. The supply of crucial cooking oils and fertilisers has also been affected.
Many companies have suspended trade and operations in Russia due to sanctions and stakeholder pressure. While the diplomatic agreement reached to unblock Black Sea trade routes from Ukrainian ports offers some encouragement, uncertainties remain. In addition, concerns over products being obtained under extortion add to the challenges for companies involved in commodity trade throughout the region.
Global baseline for transparency
Most food is produced, processed, traded and distributed by private businesses. At the same time, when an individual company looks at its impacts on global food security in isolation, it often struggles to determine them. Multinational companies may also focus on developed markets, where food security is not a significant concern. The risk is that food security is perceived as a macro ‘development’ issue, which is why expectations for transparency on food security is relatively new for many companies.
The GRI Agriculture, Aquaculture and Fishing Standard (GRI 13), launched in June, helps organizations communicate and disclose their sustainability impacts in a comprehensive and comparable way. This new reporting standard singles out food security as one of the significant issues that companies need to consider, providing a new global baseline for transparency on the topic.
As GRI 13 recognises, there is no silver bullet solution to global food security. A myriad of approaches and actions are needed, including:
Strengthening capacity so farmers can increase production and supply
This includes a newly launched 1.5 billion dollars African Emergency Food Production Facility that is delivering urgently needed seeds and fertilizers and helps producers to cover food shortages in the region. Rising fuel and transportation costs are another pressure on farmers’ incomes, further increasing the vulnerability of small producers. By reporting their contribution to the economic inclusion of farmers, companies can demonstrate the role they are playing and where more action is needed.
Partnerships and collaboration to alleviate global food security concerns
This advocates some companies working with governments and international development institutions. For example, a link-up between the International Finance Corporation and Olam Agri will boost exports of wheat, maize and soy to developing countries. The existing distribution channels of companies can be leveraged in cases of a crisis for a prompt response. This is why GRI 13 recognises partnerships on global food security as key information to report.
Greater action on food loss to ensure more food is preserved for human consumption
According to the Food and Agriculture Organization, globally 13.8 per cent of food is lost from harvest to retail. And, of course, mitigating food loss also brings cost savings and economic benefits, while reporting can help assess the efforts to minimise food loss.
Food sovereignty policies that emphasise local resilience
This will help countries that are largely dependent on food imports to redress the balance and reduce vulnerability to crises in other regions. Localised food production also reduces the distance between producers and consumers. By reporting actions to strengthen food security at the local and regional level, companies can highlight how they address food security locally or regionally.
Trade-offs and compromises
This covers issues related to land use for products or changes to align dietary choices with sustainably produced food. As the EAT-Lancet Commission report outlines, food production needs to shift to be beneficial for human health and the environment. This means businesses must make active decisions about how they are using land and natural resources.
A persistent and pressing challenge
The actions of the companies producing the essential food and materials on which humanity’s survival depends can be a multiplying factor when it comes to the UN Sustainable Development Goals. Given that we are on a trajectory to fail to reach SDG 2 (Zero Hunger), with 800 million people going hungry every day (according to a UN Food & Agriculture Organization report), it’s clear that we need private companies to take greater accountability for their food security related impacts.
Source: World Economic Forum