{"id":12097,"date":"2016-11-04T15:58:18","date_gmt":"2016-11-04T19:58:18","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/is-climate-change-a-silver-bullet-or-pot-of-gold-for-monsanto\/"},"modified":"2016-11-04T15:58:18","modified_gmt":"2016-11-04T19:58:18","slug":"is-climate-change-a-silver-bullet-or-pot-of-gold-for-monsanto","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/is-climate-change-a-silver-bullet-or-pot-of-gold-for-monsanto\/","title":{"rendered":"Is climate change a silver bullet or pot of gold for Monsanto?"},"content":{"rendered":"

The business of Monsanto<\/strong><\/span>
\nThe agriculture industry has had a significant place in the world economy for hundreds of years, and Monsanto has been a significant player in the industry for decades. Founded in 1901, Monsanto\u2019s first product was saccharine, the artificial sweetener found in sodas and other confectionery goods [1]. However, Monsanto is most widely known for its transition into biotechnology in the agriculture space with the first genetic modifications of a plant cell in the 1980\u2019s. Numerous innovations throughout the years have dramatically improved the efficiency of farming, with herbicides and genetically modified organisms being some of the most controversial.<\/p>\n

Beyond GMO’s<\/strong><\/span>
\nPutting aside the numerous health concerns over both the uses of chemicals and genetic modifications in agriculture, Monsanto\u2019s core business is selling seeds to farmers. Traditional farming is one of the most at-risk industries to climate change as crop yield is heavily dependent on temperature, rain, wind, and other weather patterns. Per a report on the economic risks of climate change in the United States, \u201cwithout adaptation, some Midwestern and Southern counties could see a decline in yields of more than 10% over the next 5 to 25 years should they continue to sow corn, wheat, soy and cotton, with a 1-in-20 chance of yield losses of these crops of more than 20%\u201d[2]. The challenge for Monsanto and the agriculture industry in general is how to innovate to address the need to feed the growing population, and to do so sustainably. Because of this, competition in this space is increasing. \u201cAgTech\u201d startup Indigo Agriculture is using new technology surrounding microbiomes to increase yields, while also improving water efficiency [3]. Furthermore, as with any big company, they have their own carbon footprint and face increased societal and regulatory pressures to mitigate any further contribution to climate change. The risks are plentiful.
\nEffect on operations<\/p>\n

Current changes to operations<\/strong><\/span>
\nThe first thing that you see when you visit Monsanto\u2019s website is an eye-catching graphic titled \u201cTaking Action to Fight Climate Change.\u201d Monsanto is clearly trying to take measures to at least appear as if they are doing their part in responding to the issue to climate change.<\/p>\n

\u201cMonsanto has a strategy for addressing the components of climate change that are related to agriculture. These include:<\/em>
\n \u2022 Collaborating with others to advance climate change adaptation and mitigation in agriculture<\/em>
\n \u2022 Improve our operations to reduce our own environmental footprint<\/em>
\n \u2022 Help lead agriculture in the fight against climate change\u201d [4]<\/em><\/p>\n

While these sound generic, the abundance of information provided on the website about carbon neutral crop production, working with partners like World Business Council for Sustainable Development, and establishing an internal carbon price appear legitimate [4]. Additionally, Monsanto appears to be embracing the risks as opportunities for growth in their bottom-line through the acquisition of Climate Change corporation in 2013, involvement in the production of water efficient maize and cotton, and continued involvement in crops for biofuel [5].<\/p>\n

However, for all its supposed efforts in environmental protection, the Company still has a $545 million environmental and litigation reserve as of August 31st related to, among other items, \u201cenvironmental remediation of sites associated with [subsidiary] Pharmacia\u2019s \u00a0former chemicals and agriculture business\u201d[6]. Furthermore, per review of the Company\u2019s 10-K, there is no mention of the quantitative impact of some of these initiatives. As such, I question whether Monsanto may be a \u201cgreenwasher\u201d and inflating the substance of their actions through an abundance of qualitative information about their partnerships, commitments, and goals without taking measurable steps to improve their sustainability. Even more telling, while the word \u201csustainable\u201d is plastered all over the website, when the word is searched in the 10-K, the only use of it is \u201csustainable source of cash and gross profit\u201d[6].<\/p>\n

Future changes to operations<\/strong><\/span>
\nIn an interview with the Wall Street Journal, Chief Executive Officer, Hugh Grant, was asked about his concern over climate change. Grant responded that, he sees challenges in the warming temperature and that \u201cin the much longer term, we’re going to have to focus on breeding to accommodate those temperature shifts\u201d [7]. The question is whether the firm will choose to be proactive, or reactive to those shifts. While it appears that they are at least aware, the apparent lack of urgency as well as the lack of information on measurable impact does not give me great hope at the actions they plan to take in the future. My recommendation would be to take it one step at a time, and take significant actions regarding that step. Instead of trying to tackle the broad issues of greenhouse gas emissions and water conservation, focus on one measurable change that the company can make and be forthright about the impact.<\/p>\n

(797 words)<\/p>\n

Sources:<\/p>\n

1- http:\/\/www.monsanto.com\/whoweare\/pages\/monsanto-history.aspx<\/a><\/p>\n

2- http:\/\/riskybusiness.org\/site\/assets\/uploads\/2015\/09\/RiskyBusiness_Report_WEB_09_08_14.pdf<\/a><\/p>\n

3- https:\/\/www.indigoag.com\/<\/a><\/p>\n

4- http:\/\/www.monsanto.com\/improvingagriculture\/pages\/climate-change.aspx<\/a><\/p>\n

5- https:\/\/www.theguardian.com\/global-development-professionals-network\/2014\/jul\/08\/top-six-innovations-smallholder-farmers-technology<\/a><\/p>\n

6- https:\/\/www.sec.gov\/Archives\/edgar\/data\/1110783\/000111078316000532\/mon-20160831x10k.htm<\/a><\/p>\n

7- http:\/\/www.wsj.com\/articles\/SB10001424127887323644904578272152056196778<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The risks and opportunities for the agriculture industry.<\/p>\n","protected":false},"author":2062,"featured_media":12098,"comment_status":"open","ping_status":"closed","template":"","categories":[1643,1218,1354],"class_list":["post-12097","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-agtech","category-climate-change","category-monsanto"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nIs climate change a silver bullet or pot of gold for Monsanto? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/is-climate-change-a-silver-bullet-or-pot-of-gold-for-monsanto\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is climate change a silver bullet or pot of gold for Monsanto? 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