The 2022 Rabobank North America F&A Summit included a series of breakout sessions designed to initiate thought sharing and discover different points of views surrounding a variety of key issues including climate-smart value-chain that will continue to impact the F&A industry into 2023.
During a breakout session titled “Fitting into a More Climate-Smart Value Chain” at the Rabobank 2022 North America Food & Agribusiness Summit, Michael Rinaldi (VP of Sustainable Business Development) and Cristian Barcan (VP of Rural Sustainability) discussed the growing pressures F&A companies face to address climate change and demonstrate positive environmental impact across their value-chain while feeding 10 billion people by 2050.
In an open discussion forum, major corporate Food & Agribusiness leaders from across the globe engaged in conversation about how to navigate current customer, market, and policy-focused concerns and innovate a more climate-smart value chain, while addressing the significant challenges expected in the short-term.
Climate Commitments in Food & Agriculture
From whole governments to individual companies, there has been a growing movement to support positive environmental outcomes and align with science-based, scope 3 targets. Commitment includes everything from carbon-neutral, regenerative agriculture, to zero-waste. Rinaldi and Barcan noted that out of the nearly 60 commitments made by Rabobank, the most notable is the UN-convened Net Zero Banking Alliance. As a committed member of this coalition, Rabobank aims align our lending and investment portfolios with a 1.5 degrees decarbonization pathway.
While these goals may feel unattainable to many, Rinaldi and Barcan posited that progress starts with supply chain collaboration and trusted communication to implement impactful strategies and take action today.
For Summit guests, the variety of terms being used across the industry creates challenges for businesses looking to set clear short- and long-term goals. At the supplier level, attendees shared that while the organization can usually meet Scope 1 and 2 standards, Scope 3 initiatives are more difficult as success is based on outside factors that are often beyond your control.
However, the real risk may come from not doing anything at all. Both Rinaldi and Barcan agreed with the consensus in the room that finding new, innovative solutions is a top priority if the F&A sector really is going to feed 10 billion people by 2050.
Defining Sustainability Priorities
With over 50 indicators of sustainability; from soil health, water use or availability and food loss; to social aspects, economic factors, succession plans, or profitability; each is important in broadly assessing future sustainability strategies.
Rinaldi and Barcan shared details about Rabobank’s annual assessment to help measure where clients are in their sustainability journey and guide them toward improvement or reassessment. Indexes, such as soil health and water use, can also help clients measure overall impact and goal management.
Key facets of sustainability to guests were:
- Water sustainability, noted as the linchpin of future global sustainability conversations
- Waste reduction
- Economic sustainability
- Social equity
Guests noted that for organizations operating globally or with multiple products, finding a set roadmap to align on is challenging yet important. Organizations must determine what their company stands for globally, but must also balance that with a clear, honest view of what they can and should aim to achieve at a regional level.
Climate and Environmental Risk
With more catastrophic environmental events occurring each year, Rinaldi and Barcan begged the question, “Can you be nimble and resilient?”
If organizations look five or 10 years into the future, or even decades down the line, will the resources they rely on today still be available? Those who choose suppliers and other partners that have access to reliable sustainable resources and resilient supply chains may be successful at mitigating such risks today and in the future. At Rabobank, steps are being taken to better understand and mitigate risks for itself and clients, such as:
- Developing impact scenarios and gathering climate data
- Building new risk models and heat maps
- Increasing client engagement and awareness on climate.
Innovations and Solutions
For one attendee, the path to sustainable solutions starts and ends at the farm level. Farmers are incredibly hardworking and innovative and will discover the optimal solutions for productivity within the systems available to them. However, all businesses further down the supply chain must work to prove to farmers that “sustainable” doesn’t mean less yield or less income—it is possible to satisfy the needs of today without compromising tomorrow.
Despite the demand for sustainable development, attendees noted that there is uncertainty surrounding the ability to find a one-size-fits-all solution. Organizations must locate areas of improvement and source the value there. By doing what organizations already are doing — but in a more efficient manner — sustainable innovations and solutions can be uncovered.
Who Is Going To Pay?
Concluding the conversation, Rinaldi and Barcan asked about the future fiscal responsibility of sustainability strategies—who is going to pay? Whether it is the consumer, corporations within the F&A sector, governments at the international, national, and regional level, or partnering financial institutions, the success or failure of future sustainability efforts will be partially determined by a willingness of multiple parties to bear the weight of a colossal investment of time, money, and sweat equity resources.
While there is a massive need for incentives to push involvement further, this investment is unlike any other investment into a future trend. Sustainability is the future, and action must be enacted soon before prime opportunities for accelerated F&A growth are lost forever.
For questions and more information on this topic, please contact Michael Rinaldi or Cristian Barcan.
Attendees of the Summit included C-suite leaders within the North American F&A sector as well as financial experts and influential startups from across the F&A supply chain.
Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, and real estate services in more than 38 countries worldwide. Founded over a century ago, Rabobank today is one of the world’s largest banks with over $660 billion in assets.
In the Americas, Rabobank Wholesale Banking North America is a premier corporate and investment bank to the food, agribusiness, commodities and energy industries. Rabo AgriFinance, a subsidiary of Rabobank, is a leading financial services provider for farmers, ranchers and agribusinesses in the United States. Together, we provide sector expertise, strategic counsel and tailored financial solutions to clients across the entire value chain. Visit www.RabobankWholesaleBankingNA.com and www.RaboAg.com.