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According to a consultancy firm serving the Irish government, global food production will need to increase by 50 per cent by 2030 to feed the world’s population. According to the BearingPoint firm of management and technology consultants, however, this cannot be achieved without dramatic consequences for the environment. The findings were revealed as part of a BearingPoint Institute Report which was released in Dublin last week.
“The growth in world demand for food offers major opportunities for Ireland but the environmental challenges are massive and will require a different approach by business,” said Peter Minogue, Managing Partner of BearingPoint Ireland, which employs about 200 people. According to the Department of Agriculture, Food and the Marine, Irish agri-food exports rose by 12 per cent to a value of 8.8 billion euro in 2011.
While many understand sustainability in its environmental dimension, the United Nations sees sustainability as being possessed of three dimensions, or pillars, also known as the “Three Es”: Environmental protection, Economic development, and social Equity. The Bruntland Report from 1987 defines sustainability as “meeting the needs of the present generation without compromising the ability of future generations to meet their needs”.
Is your business ready for the world of 2030?
The BearingPoint study quotes research which finds that, in Europe, the greatest environmental impact in the agricultural sector is not from industrial processing (11 per cent) but, more significantly, from agricultural production (49 per cent) and the use of products by consumers (18 per cent).
“In order to survive, organisations need to partner along all stages of the supply chain including protecting natural resources, working with the farming community, triggering product innovation and responding to the increasing health consciousness of consumers,” said Mr Minogue.
He said that business has entered a new era where volatility and instability are the norm. The BearingPoint paper argues that business must lead rather than follow consumers in order to secure a sustainable planet. It quotes a study which finds that, while 96 per cent of Europeans say that protecting the environment is important, only 75 per cent are prepared to buy products that respect this, with a mere 17 per cent doing so regularly.
Irish Farming and Sustainability
One sector of Irish agriculture that looks set to expand greatly in the coming years is dairy farming. Speaking in advance of Bord Bia’s Food and Drinks Summit in June of this year, the Minister for Agriculture, Food and the Marine, Simon Coveney TD, said that he had asked Bord Bia to begin work with key stakeholders on the development of a national sustainability programme for the dairy sector.
Referring to the Food Harvest 2020 targets for the dairy sector, the Minister said that environmental sustainability would be a key factor when it came to planning for a 50 per cent expansion in dairy production:
“In Food Harvest 2020, the Irish dairy sector has set an ambitious 50 per cent expansion target for itself, against the background of milk quota abolition in 2015. We know that Irish dairy farmers can meet these production targets, and that this will deliver a tremendous dividend for the Irish economy. Of course this expansion will only happen if it is profitable, and this means increasing value added, finding new markets, expanding market share in traditional markets, and reducing costs at primary production level.
“We also know that environmental sustainability is an increasingly important issue in the market place for many international dairy operators, and equally that it can be the foundation stone for a national brand image for Ireland based on our mild maritime climate, plentiful supplies of water, grass-based production, and an already positive green image. There is also a strong correlation between the measures needed to improve environmental sustainability and those needed to reduce the costs of production at farm level and improve profitability,” said Mr Coveney.
How CEOs think
After interviews with the leaders of 33 international organisations, the findings of the BearingPoint study reveal a fundamental shift in the thinking of CEOs. “Sustainability is now seen not only as a major facet of their commercial differentiation but, more strikingly, essential for their medium-term survival,” said Mr Minogue. “This is in sharp contrast to previous years, where sustainability was a purely defensive play to address greater regulation or ‘greenwash’ their public image.”
Mr Xavier Houot, author of the paper and partner at BearingPoint focusing on sustainability services, said businesses need to examine whether their practices are sustainable over the longer term. “Just like banking stress tests, sustainability stress tests assess the resilience and durability of a company’s economic activity for the years to come. For most companies, viewing their business environment in 2030 has always been a lower priority task, with the focus more on addressing short to medium term constraints and opportunities. These … tests provide business leaders with a powerful tool to view their mid to longer term business environment and to answer the question: ‘Is my business model compatible with the world of 2030?’”
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