Agricultural impact assessment - a practical approach to sustainability in farming
Many agricultural stakeholders, including landowners and farmers, express a growing interest in comprehending the non-financial implications of their investments. Agricultural ventures yield non-financial benefits that enhance assets value, generating positive social and environmental impact. However, the endeavor of measuring and reporting these impacts is no simple task; it unveils multiple challenges necessitating flexibility, accurate ground-truth data, and a wealth of management knowledge and practical experience.
The widely accepted framework of Environmental, Social, and Corporate Governance (ESG) may serve as a foundational basis for incorporating impact considerations into agricultural businesses. Yet, this movement has encountered criticism for its lack of clarity, a tendency towards excessive “virtue signaling”, and a troubling inclination on biased ideas that fall short in addressing the genuine complexities of farming. While several ESG metrics propose aligning impact goals with financial and technical performance, it's essential to understand that sustainable farming development necessitates a clear alignment of business design and management with solid financial objectives. We shouldn't underestimate the financial needs of farming, as doing so may undermine the advocacy for other vital sustainability goals. We clearly believe this is particularly crucial in modern farming today.
Measuring, tracking, and reporting (MTR) the non-financial aspects of agricultural businesses is pivotal for fostering real sustainability investing. However, while effective farming extends beyond financial returns, avoiding simplistic approaches is imperative. However, this emphasis on depth shouldn't imply that assessing the impact in agriculture must become an excessively theoretical and complex exercise. As former US President Eisenhower once noted, “Farming looks mighty easy when your plow is a pencil and you're a thousand miles from the field”. This highlights the necessity of grounded knowledge and practical experience for authentic impact assessment. Moreover, MTR in agriculture needs to be clear and practically feasible. The optimization of resources, including time, costs, and data-related tasks, must be addressed from both technical and economic perspectives. We should keep it as simple as possible.
While there is a lack of a well-defined global standard for impact definition and metrics in agriculture, this absence can be viewed positively. It allows for flexibility in addressing the multitude of variables inherent in our activities. Agriculture encompasses resource utilization, energy transformation, employment generation, and diverse contributions to environmental balances. Therefore, it necessitates nuanced and case-by-case knowledge. Despite the vast horizon of different possibilities, at SISTAGRO-CLR, we believe that three main rules of thumb must be followed to deliver real value in this endeavor.
Focus on measurable outcomes: The first fundamental rule in promoting effective impact assessment in agricultural projects is to focus on measurable outcomes. Embracing the idea that what isn't measured cannot be objectively evaluated and improved aligns with the definition by the ‘Global Impact Investment Network’ that emphasizes “positive, measurable impact alongside financial returns”. Regrettably, many stakeholders exploit these concepts simply for image-washing, making superficial changes to secure certifications without genuinely altering their economic, environmental, or social impact. Moreover, market perspectives remain affected by a lack of clarity, as consumers predominantly prioritize price, consistently undervaluing all the supplementary efforts businesses dedicate to fostering various forms of positive impact. However, we see the market undervaluation as also rooted in the absence of well-defined and measurable requirements necessary to effectively communicate the intrinsic value of many agricultural goods to the public.
Define impact goals and promote continuous evaluation: Simultaneously with identifying measurable factors, it is essential to establish concrete impact goals from the outset. Understanding the relevance of these objectives and the extent of their consequences is crucial. This exercise requires an internal flexible approach, fostering ongoing openness, debate, and long-term continuous evaluation. Therefore, closing the spectrum to generic labeling may not be the optimal approach from an objective perspective when pursuing real added value in agricultural activities.
Establish a culture of honesty and tracking in record-keeping: An additional crucial element in effective impact assessment strategies for agriculture involves promoting farm operators and managers with a solid track record of farming operations. At SISTAGRO-CLR, we believe, and promote, that valuable farm data does not simply comes from modern data systems, but it results mainly from well-designed working-strategies and skilled individuals. This requires ongoing education and cultural awareness within the working environment, emphasizing the significance of documenting daily farm tasks. For that, we must promote a robust culture of honesty in data management and meticulous farm recording, facilitating feasible data analytics and valuable impact assessment.
In conclusion, to implement a positive impact strategy in agriculture, clarity on the targeted impacts, establishment of specific and measurable goals, and a commitment to high standards of data collection at the farm level are paramount. At SISTAGRO-CLR, we actively engage in these steps with our collaborators and clients.
Our dedication lies in elevating technical knowledge, farming experience, and strategic consultancy to new heights, providing insightful measurements of critical components of farming impact. For further information on our professional services, please don't hesitate to contact us. We are eager to understand your needs and assist you in designing and achieving your impact goals.