Business leadership is needed for a deep, rapid and systemic transformation of the food system to achieve healthy people and a healthy planet. So says the World Business Council for Sustainable Development, a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world. Its executive committee includes Unilever CEP Alan Jope, Nestlé’s executive vice president Magdi Batato and Kellogg Company’s CEO and chairman Steve Cahillane.
Peter Bakker, WBCSD President and CEO, said: “There is no doubt about the need to act now; we have seen a flurry of science and reports highlighting the need for urgent action. However, so far none of these reports have focused on the business leadership needed to provide the critical solutions for the food system transformation.”
Increasing urgency for food system transformation
The WBCSD’s CEO Guide to Food System Transformation outlines seven pathways and clear actions for CEOs to transform our food system in the next decade.
“Current food systems are outstripping the planet's resources while current diets are resulting in global health crises of both over- and undernutrition,” the WBCSD wrote. “Continuing population growth and changes in dietary habits will amplify these crises.”
Major scientific and economic reports, it said, are all sounding a clear alarm on the urgent need to act today. “Public opinion and consumer demands are increasing pressure while innovation and technology are creating business opportunities.”
It claims that delivering these transformation pathways could unlock $4.5 trillion in new business opportunities each year by 2030. At the same time, this will save $5.7 trillion a year in damage to people and the planet by 2030, more than 15 times the investment cost of up to $350 billion a year.
1. Agriculture transformation
Business leaders, according to WBCSD, need to adopt transformative inputs and farming techniques and optimise crop varieties/mix to local conditions in both agri- and aquaculture while restoring the environment.
To this end, food leaders should:
- Develop transformative inputs for nutrition, nature and climate (seeds, feeds, fertilisers)
- Deploy and scale solutions such us circular nutrient management, climate-smart agriculture, regenerative practices and rebalancing seeds and crop diversity
- Rebalance production to optimise crop mix based on local conditions and nutritional value
- Generate value by investing in approaches that deliver natural climate solutions, improve biodiversity and create nature-based solutions
“Nestlé believes that protecting and restoring biodiversity is essential to safeguard food production and food security now and for the future. Nestlé has for many years worked with farmers to manage their land sustainably and will continue to lead activities enhancing biodiversity,” Mark Schneider CEO, Nestlé S.A, told the report.
2. Equitable value distribution
The WBCSD called on the food industry to deploy contracting practices, educational approaches and new technologies to create equitable distribution of value for farmer livelihoods and rural communities by methods including:
- Introducing cost-effective technology for on-farm data management and to-farm traceability
- Leveraging and scaling insurance and finance mechanisms
- Building capacity with smallholders for the adoption of locally appropriate new practices and technologies
- Creating sustainable and longer term contracting practices to share value equitably through to farm
- Assessing and strengthen resilience in supply chain via climate resilience, gender equity and hunger alleviation
“For social and environmental stability, it is key that industry and governments empower smallholder farmers to increase the income generated by their farm through diversified farming,” said Barry Callebaut CEO Antoine de Saint-Affrique.
3. Dietary shifts
The industry should support consumers to make healthy and sustainable dietary choices, said WBCSD while shaping demand through new product formulations and effective marketing.
Globally, two billion people lack sufficient vitamins and minerals in their diets, leading to higher risks of stunting, anaemia and other diseases, noted the WBCSD. Vegetables, fruits and nuts high in these essential nutrients are often not accessible or affordable, especially in developing countries.
One answer lay in fortifying rice with vital micronutrients, which the WBCSD suggested is an effective, affordable and scalable solution and a great way to reach people at scale.
4. Food loss and waste
The document called on food loss and waste to be slashed across the system by reducing supply chain inefficiencies, adopting the bioeconomy and increasing awareness of producers and consumers.
The action plan cited the example of WBCSD’s Food Loss and Waste Value Calculator used by companies such as Nestlé. “This was able to translate food loss and waste reduction to environmental and nutrition impacts in its milk supply chain in 30 countries. For example, Nestlé was able to avoid the loss of 599 tonnes of protein, which is equivalent to one day's protein requirements for 11.2 million people. It also avoided indirect emissions of 27,000 tonnes of CO2 equivalent in terms of milk produced, which is about the same as eliminating 2,470 trips around the world in a small car.”
Other solutions to food waste, noted the WBCSD, lay in improving date labelling and portion size data, and improved storage and supply chain infrastructure.
Actions for CEOs:
- Set ambitious corporate goals that aim to deliver on global frameworks
- Transform supply chains
- Set business metrics incorporating externalities in assessing performance
- Engage and incentivise employees across R&D and commercial teams to build solutions
- Ensure business strategy delivers collective license to operate
- Work across value chains to achieve breakthrough solutions
- Shape consumer preferences and lifestyles
- Engage communities in solutions that address poverty and build both capacity and resilience
Food leaders need to build visibility and traceability across the value chain, said the WBCSD, with new levels of data to assure sustainable sourcing, increased farmer income, decreased food fraud, reduced food loss and waste and greater consumer awareness. To this end, businesses should:
- Develop technology-enabled end-to-end traceability to track comprehensive and consistent data across the supply chain
- Test and scale distributed ledger technology that shares, aggregates and analyses data to strengthen value chain linkages
“Having transparency is fundamental. You need to bring multiple independent players to the table and align on what is best practice,” said Ruth Kimmelshue, Cargill Senior Vice-President, Business Operations and Supply Chain.
6. Policy and finance
Business need to speed up and strengthen policy and financial mechanisms to stimulate food system transformation, ranging from basic to cutting edge. The WBCSD analysis cited the case of COFCO International, a global agribusiness company that has partnered with a consortium of 21 banks to create a $2.3 billion sustainability-linked loan as the company’s core financing facility.
Under the terms of this loan, COFCO will pay a lower interest rate if it achieves a year-on-year improvement in environmental, social and corporate governance (ESG) performance, and increases the traceability of agricultural commodities, with a focus on directly sourced soy in Brazil.
7. New business models
Last is the need for new business models that allow for better consideration of externalities to reflect true value and that create deeper collaboration with diverse stakeholders across sectors.
Businesses, declared WBCSD, need to:
- Reshape business, portfolio and value chain for resilience and advantaged performance
- Launch cross-value-chain collaborations with innovative economics to de-risk innovations, scale solutions faster, and reach the last mile (both farmer and consumer)
- Include externalities in financial performance assessment to reflect true value
- Use the circular bioeconomy to alleviate resource supply risks, shift from fossil-fuel and non-renewable resources to sustainable, renewable biomass, repurpose agricultural waste and recycle nutrients
WBCSD noted Bayer's Made in Farm online platform, which connects smallholder farmers directly with consumers or traders. The platform helps farmers and buyers meet, negotiate and close deals online, while also displaying offers from farmers who are encouraged to add information regarding production, such as location and post-harvesting treatments. To date, the platform has seen more than €10 million in transactions and connected 13 million consumers.
“It is possible to have both economic viability and sustainability; but to accomplish this, incentives need to be set and we need to work together across the value chain,” said Kellogg Company’s Amy Senter Chief Sustainability Officer.
‘Leaders will thrive’
“The business-led solutions in these pathways must deliver the goals for people, climate and nature,” concluded the WBCSD. “While there will be trade-offs to address, those companies that lead, managing through the disruption, will thrive.”