Syngenta: feeding future generations?
One of the largest agrochemicals businesses wants to address one of the toughest challenges in our generation: feeding the growing world population in a sustainable way.
In 2016 the number of undernourished people in the world increased after a decade of continued decline: from 926 million in 2005 to 777 million in 2015 and 815 million in 2016 [1]. This recent increase is cause for great concern and points to an uptick in food insecurity that goes hand in hand with climate change. The dramatic change in the world’s climate is translating into more extreme and frequent weather events, heat waves, droughts and sea-level rise which have a negative impact on agriculture worldwide. The implications for food security are straight-forward: more unstable agricultural output means less capacity to feed a growing population. By 2050, there will be 2.4 billion more people living in our planet [2]. How to produce enough food for all while not damaging the environment is one of the biggest challenges to be urgently addressed in the coming years.
At the crucible of this question is Syngenta, one of the world’s largest producers of agrochemicals and seeds. Syngenta sees itself as the business that helps humanity close the gap between food need and agricultural insecurity through first class R&D (they invest around $1.3 billion per year [3]) and innovative crop solutions. Climate change and resulting food insecurity present both opportunities and challenges for Syngenta. On the one hand, the company will benefit from this massive challenge if it is able to create products for farmers and growers that increase agriculture yield and output while using the same (or less) amount of land, water and inputs. On the other hand, producing more with less seems like an oxymoron in today’s world and the company must also do so while having a sustainable supply chain and operations.
Syngenta is making progress in its mission – enabling farmers and growers to feed the world in a sustainable way – through The Good Growth Plan [4] which was presented in September 2013. This plan is composed of six commitments to be achieved by 2020 (outlined in the following table: Syngenta The Good Growth Plan 2020 Commitments [5]).
Each of the six commitments is being tracked on an annual basis against the 2020 goals and each of them has had different levels of success so far. An example among many others of how these commitments are being implemented in practical terms is the INTEGRASOJA product in Latin America, which is an integrated solution that includes not only the agrochemical products to increase yield in soy farms, but also water and soil nutrition management services that ensure more sustainable use of land.
In addition to the short / mid-term sustainability objectives institutionalized through the Good Growth Plan, Syngenta is also working towards its mission and strategy of providing a sustainable solution to food insecurity by committing to sustainable operations and supply chain management. This is articulated through five focus areas:
- Energy
- Water
- Waste
- Supplier impacts
- CO2 from distribution
With the three first focus areas the company is looking to use resources more efficiently in its 107 global production sites; the two other areas relate to the way Syngenta works with suppliers of raw materials (chemical companies mostly) and logistics service providers. While these are exactly the right key areas to look into in terms of efficiently managing operations and having a positive impact up and down the value chain, Syngenta does not publish its goals for each of these focus areas and only publishes performance data for the usage of the first three resources. The company seems to be much less stringent on, and therefore much less committed to, its sustainable operations goals. Similar to what they have done for The Good Growth Plan, Syngenta’s management should commit to “The Sustainable Operations Plan” and publicly explain the exact initiatives that fall into the five focus areas mentioned above as well as track their progress versus objectives. This would also put suppliers in the spotlight and pressure them to implement sustainable practices in a much more public and forceful way. By also impacting the supply chain upwards, Syngenta could potentially lead a positive transformation of the chemical industry overall, which accounts for approximately 20% of the global industrial sector energy consumption [6].
Syngenta is spearheading the effort to bridge the food scarcity – agricultural output gap. However, their innovations are controversial for those who argue that the use of chemicals and biotech in farming is not a sustainable solution. Another potential solution could come in the way of more digitization in the agricultural industry to better forecast supply and demand locally. I welcome suggestions on how to make digitization an efficient tool in this debate.
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Footnotes:
[1] FAO, IFAD, UNICEF, WFP and WHO, “The State of Food Security and Nutrition in the World 2017” (March 2017)
[2] World Bank, “Population Estimates and Projections” (October 2017)
[3] Syngenta, Annual Review 2016 (2016)
[4] https://www.syngenta.com/what-we-do/the-good-growth-plan
[5] Source: Syngenta, “The Good Growth Plan Progress Report 2016” (2016)
[6] Energy Information Administration, “Industrial Sector Energy Consumption” (2012)
Maria, thanks so much for this great discussion on sustainability! I agree with your recommendations for Syngenta to publicly commit to their goals and create transparent metrics by which to evaluate their progress. At the heart of this issue is the role of authenticity and accountability. Interestingly, a study by Bain found that only 2% of companies achieve their sustainability goals (https://www.forbes.com/sites/deeppatel/2017/11/17/4-ways-companies-can-reach-millennials-with-a-message-of-sustainability/#1d1b870aff80). The root cause is potentially a failure by management to set realistic expectations and metrics. While some argue that any progress in sustainability is good progress, I believe that inauthentic efforts that cuts corners can be counterproductive by setting the bar low for others and undermining opportunities for real progress. If companies are using sustainability as a public relations push, do you think there should be external groups tasked with holding these company initiatives accountable, assuming that the management teams will not?
Interesting article, and I agree with your assessment that the company is shirking its commitments a bit by not setting goals and evaluating progress for supplier sustainability and distribution emissions. I wonder how much of this issue is a result of the difficulty of measuring sustainability metrics for these two factors, since these exist outside of the company. For example, the link below is a research paper on sustainability in supply chains, and notes that a “large proportion of firms studied did not (or could not) accurately measure the mass of materials flowing through their production processes.”. Nevertheless, this only reinforces your point – if the company were more committed to those two metrics they would invest the resources needed to evaluate itself by them.
https://pdfs.semanticscholar.org/5b46/7b74c20be22422d051cd7164b8602267208e.pdf
Totally agree with your analysis Maria. In my opinion, Syngenta, as a leader in the agro-chemical business, should commit to become a global leader in sustainability, too. Considering its declared mission (“feed the world in a sustainable way”), makes me think that sustainability should be one of the core activities at Syngenta. Nevertheless, half of the The Good Growth Plan 2020 Commitments focus more on people rather than on environment care and sustainability. While I understand that labor safety and fair work conditions are critical aspects of the agricultural and chemical developing businesses, I miss more initiatives related to the climate change impact of the industry, like decreasing emissions across the supply chain, for instance.
Regarding the operational sustainability initiatives, it does not make any sense to pretend to be committed without tracking the results and measuring the impact periodically. That is a serious fault to me, because it not only takes away the program’s credibility but also encourage the whole industry to not really care about addressing the real problems on sustainability.
Thank you Maria for the highly interesting article! I completely agree with Gregorio above when he says that Syngenta has a responsibility as an agricultural behemoth to take a leadership role on sustainability. I don’t believe they are currently doing an optimal job. The last pillar of their 2020 sustainability goals, “Look After Every Worker”, instantly pops out at me. This goal, as it is currently worded, is nondescript and vague.
Syngenta needs to be extremely deliberate about each of their stated sustainability goals. This entails ensuring that each goal can be measured quantitatively or against some qualitative standard. For example, Syngenta could become a signatory to a major industry initiative that promises to provide fair working conditions. If this does not exist, Syngenta could create its own. Until Syngenta is more clear and transparent on measuring its goals, they will not be seen as the global leader in agricultural sustainability.