Why is this subject being discussed in a publication focussed on agriculture? Large companies who buy processed cereals often need to set a verified science-based target for emissions and that most likely includes the impact of forestry, land-use and agriculture (FLAG), hence their keen interest in what agricultural practices are best to minimise embedded carbon and maintain a suitable supply of good quality low carbon ingredients for the future.
The overarching financial justification is that supply chain partners who value Environmental Social Governance (ESG) consistently show improved profit of 13%, whilst those who fail to realise the benefits of ESG lag behind with reduced margins of around 10%. Risk reduction linked to resilience and margin protection has to be the key to handling the mounting pressures climate change is placing on growing sufficient food, reducing input costs and understanding how financial rewards for GHG reduction are effectively remunerated and shared across the whole supply chain. How can a strong ESG reporting framework and action plan help to deliver these?
There are around 30 countries and territories that have mandatory ESG disclosure requirements. For global investors the IFRS SASB standards approach has emerged as the preference and in Europe the Corporate Sustainability Reporting Directive (CSRD) and its excellent guidelines the European Sustainability Reporting Standards (ESRS) as the most comprehensive mandatory reporting platform. Legislatures generally adopt an IFRS-aligned approach: UK (UK Sustainability Reporting Standards also aligned with CSRD and Global Reporting Initiative (GRi), Malaysia (National Sustainability Reporting Framework (NSRF), Hong Kong (Main Board listing rules, HKFRS Sustainability Disclosure), Singapore, Philippines, Japan (Sustainability Standards Board). In USA the Securities and Exchange Commission has set requirements but currently not at state level and primarily in California (SB26, SB219).