Regenerative agriculture is a business imperative for multinationals

Every time you walk through a supermarket looking for snacks, drinks, and other food products, you find hundreds and hundreds of items made by major consumer product companies. Have you ever wondered where the ingredients for all these treats come from?

Consumer product companies source and source products in a variety of ways, and until recently, most were produced using conventional and industrialized agricultural methods. These practices consume fossil fuels, water and topsoil at unsustainable rates and contribute to many forms of environmental degradation and soil depletion, thereby diminishing biodiversity.

One way to counter the negative impacts of industrialized agriculture is to use regenerative practices that restore ecosystems, improve soil health and enhance biodiversity. Joining forces to accelerate the transition away from harmful conventional models, industry experts, farmers and policymakers recently came together at the European Regenerative Agriculture Summit in Amsterdam.

Commitment to regenerative agriculture

“We are acutely aware of the implication of climate change on our supply chains and our inability to source raw materials for our brands,” said Philip Werkmann, head of sustainability at Nestlé, presenting a pilot project regenerative project carried out with Klim, local farmers. , and Nestlé in Germany. “One of our commitments is to increase the amount of key ingredients we source from regenerative agriculture. Failure to achieve this ambition constitutes a commercial risk.

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Companies like Nestlé are integrating net zero commitments directly into their business strategy. To be successful, these commitments, such as reducing carbon emissions by 20% by 2025 and 50% by 2030, must be cascaded down to all levels of the organization, influencing daily operations and ensuring accountability .

At the same time, collecting accurate data is essential not only to track progress, but also to protect against accusations of greenwashing. Companies are acutely aware that consumer trust can be quickly eroded if their sustainability claims are not backed up by concrete evidence.

These ideas were shared by representatives of some multinational brands at the event. During a panel focused on corporate climate strategy, the conversation focused on the need for companies to set climate goals and engage executives to achieve these ambitious goals.

Luc Beerens, global director of sustainable sourcing at Mars Inc., highlighted the advantage of being a family business. Mars is transforming the way it sources key raw materials like palm oil, cocoa, fish and grains.

“We recognize that solving environmental problems is a generational challenge,” Beerens said. “At Mars, the family has integrated a set of sustainability KPIs, including circular packaging and carbon footprint, into senior executive compensation, with human rights soon to follow. »

The key to agricultural resilience

One of the challenges consistently raised by panelists was how to align diverse stakeholders, ranging from farmers to business leaders, around a common goal. This is particularly complex when working within a global supply chain that relies on the unique realities of local communities. Many companies are running pilot projects promoting engagement with farmers, allowing them to share their expertise and adapt practices best suited to their local context.

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Local engagement not only empowers farmers but also helps ensure the successful implementation of agronomic practices. After all, this is an industry where “one-size-fits-all” solutions rarely work. Whether producing coffee in Indonesia or milk in Brazil, agriculture is a place-based science, requiring approaches tailored to different regions and cultures and leveraging the expertise of local agronomists who understand the unique challenges and relationships in each region.

Another key takeaway was the importance of building resilience into supply chains. Farmers who adopted agroforestry and income diversification through multiple cropping not only achieved higher yields but were also better protected against climate shocks like droughts. By improving farmer and supply chain resilience, businesses can create more sustainable operations, equipped to withstand future environmental challenges.

Areas for improvement

The panel agreed that large-scale adoption of regenerative agricultural practices requires a significant initial investment. Even as private companies step in to financially support this transition, policymakers also have a vital role to play. Aligning subsidies with regenerative practices can help clarify the economic case for farmers, encouraging broader adoption.

However, policies alone are not enough. Farmers need technical and financial resources to implement changes. Only by translating broad policy goals into concrete measures can governments and financial institutions truly support the transition to sustainable development.

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Last but not least, Effective communication is essential to maintaining consumer trust. As sustainability initiatives gain momentum, companies are increasingly aware of the need to avoid greenwashing, where their efforts appear disingenuous or purely marketing. The panel agreed that more authentic communications strategies are needed to effectively engage consumers and executives.

One innovative suggestion was to create platforms that directly connect farmers to consumers, helping to bridge the trust gap and demonstrate tangible results of sustainable practices. As companies continue to make progress in developing regenerative agriculture, opening their doors to consumers may become a key strategy for proving the legitimacy of their efforts.

The solution for smart agriculture

In summary, the debate around climate goals and sustainability strategies increasingly focuses on resilience, localized approaches and the importance of upfront investment. While the challenges are complex, from aligning various stakeholders to ensuring accurate metrics, the path forward is clear. Multinational brands must continue to engage with local communities, build the resilience of supply chains, and measure and communicate progress transparently if they are to achieve their climate goals and maintain consumer confidence.

When it comes to collecting accurate data for measurement and evidence, the good news is that many players in the food supply chain are already digitizing agricultural processes and services.

“The SAP Intelligent Agriculture solution helps food and beverage companies increase efficiency, improve data quality and connect existing data sets to gain insights and support audit tasks,” said Anja Strothkaemper, vice -President of Agri-Food and Raw Materials Management at SAP. Strothkaemper was speaking at the same event on the benefits of leveraging data for regenerative agriculture.