Bracing for change: Why food & agriculture need sustainability and resilience in a post-pandemic world
Even before the United Nations (UN) published its Sustainable Development Goals (SDGs) in 2015, the food and agriculture sector had recognised the urgent need for greater sustainability. The UN’s programme highlighted goals such as ensuring sustainable consumption and production patterns; restoring, protecting and promoting sustainable ecosystems; and taking urgent action to combat climate change. Five years on, the Covid-19 pandemic is accelerating the transformation to fully sustainable food and agriculture production.
“The hard work of sustainability is long-term and will continue because it is embedded in basic conservation, such as the means of crop production, transportation and smaller actions, such as reducing how much water is used at a processing plant,” argues Dan Lamprecht, ING’s Head of Food & Agribusiness for North America. “Individual firms may have interruptions in their cashflows, but sustainability is a function of capital expenditure and there is good reason to keep long-term investment going in the right direction.”
Why? Well, because the sustainability agenda looks even more important in the wake of the pandemic – it offers solutions to precisely the challenges Covid-19 has thrown up, from the need to rethink supply chains to the imperative to reduce waste.
“This is a sector that often operates on very tight margins and, therefore, anything you can do to improve efficiency is valuable. But it has to be seen in the context of what is resilient and what is, therefore, sustainable,” says Mark Cliffe, ING’s Head of Global Horizons.
Above all, with heightened exposure to disruptions, from extreme weather to the pandemic and trade sanctions, there is an ongoing need to invest in the resilience of food and agricultural businesses. Deborah Perkins, ING’s Global Head of Food & Agribusiness, expects the focus on sustainability to continue but warns that a recession will weigh on consumer spending. “In part, companies will continue to try to be efficient, while also being sustainable. But sustainability will be driven by things other than the consumers, because consumers will be more focused on affordability.”
Changing consumer behaviours highlight the overlap between pandemic response and sustainability. In difficult economic times, consumers may be less willing to pay premium prices for more sustainable foods; equally, the pandemic has prompted changes in consumer behaviour; for instance, encouraging cooking at home with locally sourced ingredients. If this move to localism endures, food and agriculture will move away from expensive and environmentally damaging global supply chains. “We got into the habit of thinking we can have any food at any time of the year, but people may now change their eating habits,” says Mark Cliffe.
Appetite for change
Consider the increased focus on health and wellbeing in the wake of the pandemic. “Being more healthy means focusing on nutrition, which is linked to certain types of products – plant-based foods in particular,” says Kiran Sanchit, ING’s Head of Food & Agribusiness for EMEA. A retreat from meat-based diets would have substantial positive implications for sustainability, freeing up land for new uses and reducing carbon emissions.
Technological innovation can continue to flourish in a post-pandemic world, with a range of associated sustainability benefits. Amid increasingly intensive scrutiny of food standards and sourcing, distributed ledger technology provides a means by which to track products as they move through the supply chain. Greater automation offers opportunities to improve efficiency and enhance yields – but also to cope with the difficulties of social distancing in the labour force.
In other words, sustainability goes hand in hand with recovery, supporting resilience, efficiency and new ways of doing business that are more appropriate to a post-pandemic world. Food and agriculture will continue to play a crucial role in achieving climate targets and the UN’s SDGs up to 2030 and beyond.
“It's not just about the pandemic. It's also about climate change, environmental degradation, water, soil erosion, biodiversity and labour working conditions. In essence, the sustainable development goals of the UN, identified a few years ago, are now back on the agenda with some force. This interplay between public policy, and technology, and the underlying economics, and the business dynamics is a very rich one,” confirms Mark Cliffe.
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