As world leaders convene for COP28, agrifood systems must face up to the challenge of pursuing a “just transition”, ensuring that the benefits of moving to a green economy are distributed equitably. However, the sector currently has a single focus on reducing greenhouse gas emissions. Harpinder Sandhu and Sukhbir Sandhu write that, to ensure a just transition, agriculture must make progress on all ESG indicators (environmental, social and governance).
Global agrifood systems spread over nearly one-third of the earth’s surface, employ more than 1.3 billion people and contribute $3.8 trillion annually to the world’s GDP. Commercial farming has changed the surface of the earth at an unprecedented scale, including many negative environmental, societal and health impacts.
The current ways of producing, processing, transporting, and consuming food are not delivering healthy outcomes for the planet and society. The present focus on producing more calories per hectare, irrespective of the impacts on society and the environment, is antithetical to the demands of sustainability. A just transition will involve making progress on all environmental, social and governance (ESG) indicators relevant to the sector, such as healthy and functioning ecosystems, societal interactions, relationships, rules, policy, etc.
This problem ranks high in the agenda of COP28 UAE (30 Nov – 12 Dec 2023) and has also been highlighted at the United Nations Food Systems Summit. The just transition of agrifood systems is possible only if the sector makes progress on achieving zero hunger, environmental sustainability, building climate resilience, job creation, poverty reduction and social equity.
However, instead of adopting a responsible and inclusive agenda to address ESG factors holistically, the global agrifood community is focusing only on addressing greenhouse gas (GHG) emission reduction (through promoting regenerative agriculture, carbon offsets, and reducing emission intensity). These strategies, while important, focus only on reducing GHG emissions through changes in management practices at the farm level and through market intervention – essentially through contested carbon offsets. This partial agenda is often driven by Big Ag (large agricultural corporations and agribusiness industry), which often diminishes the contribution of more than 600 million smallholder and family farms that produce 80 per cent of world food by value. While reducing GHG emissions is crucial, it’s equally important to consider other ESG factors.
The problem of the single focus on emissions
Big Ag focuses on measuring and reducing GHG emissions on Scope 1 (direct emissions of a farm or agricultural business) and Scope 2 (indirect emissions from the production of purchased power). However, Scope 3 (which covers indirect emissions that are generated by producing inputs such as fertilisers, herbicides, etc.) accounts for more than 50 per cent of total emissions and is not included.
In addition, most agribusinesses are either using (or planning to use) contested carbon offsets to balance off these partially measured emissions. Some are implementing changes in production practices by adopting regenerative and sustainable intensification methods related to monitoring and sequestering carbon in soil and vegetation.
Agrifood systems are unique as they not only affect but also are affected by many ESG factors. Their effective functioning depends on the full gamut of ESG factors. Agrifood systems depend on E (healthy and functioning ecosystems, provision of ecosystem services, pollination, etc.); S (societal interactions, relationships, and formal or informal institutions); and G (people, rules, policy, and decision-making, lobbying power to change legislation and policy, etc.).
Problem with impact assessment
Currently, Big Ag measures the risk that environmental and social challenges pose to them rather than the risk they pose to the environment and society. Agriculture is not only affected by climate change but is also a key driver and contributes significantly to climate change. These impacts and risks need to be measured more cohesively. Agribusinesses that measure only GHG impacts continue to externalise harm to society by measuring the impact of environmental challenges on them. They do not fully measure their impacts on society and the environment.
The way forward
Focusing on GHG emissions is not enough to make holistic progress on a just transition. Agrifood businesses must measure and disclose their impacts on all ESG factors using a standardised framework such as the United Nations Environment Programme’s The Economics of Ecosystems and Biodiversity for Agriculture and Food (TEEBAgriFood). This framework accounts for all ESG indicators and expresses the measurements of monetary value, which can be reflected in the profit and loss statements of farm, agribusiness and national accounts.
Applying the TEEBAgriFood framework can improve understanding of the negative impacts of agrifood systems. This can help develop appropriate policy responses to reduce harm and establish more resilient solutions for a just transition. In addition, we also need regulation. Without a regulatory framework and standardised ESG measurement and disclosure, ESG will continue to be hijacked by vested interests – leaving it of little use in its intended purpose of just transition.
In sum, at COP 28, the sole focus on emissions, primarily driven by Big Ag, will not be enough to make any significant changes in the way we grow, process and consume our food.
The global community must adopt a socially and environmentally responsible agenda for a just transition of agrifood systems by addressing all ESG impacts. This will help meet the increasing demand for diverse types of nutritious food, grown sustainably, for a projected human population of 10 billion by 2050. This approach will also help achieve many of the UN’s food-related sustainable development goals (SDGs) by recognising the interconnectedness of various ESG factors in shaping sustainable and resilient food systems. Such holistic assessment can help develop pathways towards a just transition for global agrifood systems.
- This blog post first appeared at LSE Business Review.
- Featured image provided by Shutterstock.
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- Note: The post gives the views of its author, not of USAPP– American Politics and Policy, nor of the London School of Economics.
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