Keynote speech delivered by Mike Barry, at the Origin Green Gold Member Announcement in the RDS, Dublin, Nov 19th 2020.
Today we are gathered to celebrate leadership on sustainability.
Individual company leadership, as we celebrate those companies achieving Gold Status.
But also sector leadership by Bord Bia, and national leadership by the Irish Government, in setting up the Origin Green program back in 2012 to help the entire Irish food and farming sector to become systemically more sustainable.
It may seem a little strange to be talking about sustainability at the heart of the worst health crisis to hit the globe in 100 years. A crisis that’s still unfolding and that I know has impacted hugely people, families, communities and businesses across Ireland.
But all this pain creates an imperative for us to #buildbackbetter, re-double our efforts to create a society and supporting economy that serves the needs of citizens and society whilst regenerating nature.
Ireland can be proud of having the most advanced whole sector sustainability program in the world for food and farming but I’d contend that all the hard work of the last 8 years is but a dress rehearsal for responding to the disruptive shock that sustainability will wrought on every sector in the global economy in the next decade.
Whether climate change; biodiversity loss; and plastic pollution; or issues to do with mental and physical wellbeing, poverty, equality, fairness, diversity and inclusion how we all do business in 2030 will be radically different from today.
Let me remind you that despite the success of the Paris Climate Agreement in 2015 we are still on course for at least 3C of global average temperature rise by 2100, quite possibly 4C. And for those who still question whether the temperature shift between 0900 in the morning and lunchtime is really important let me remind you that 10,000 years ago global average temperatures were about 5-6C colder than today, it was the last Ice Age and much of our shared Islands was covered in 1000m of ice.
The 1C rise in global average temperatures we’ve seen in the last few decades has been enough to unleash punishing wildfires from the Arctic down the west coast of the USA to Brazil and flooding from the Southern US, across Europe to the Indian Sub-continent.
A potential further 2-3C warming will have enormous implications for food production globally, suppressing yields, making quality and availability harder to manage and of course reducing returns for farmers and manufacturers alike.
Today is not the time for a science lecture. I could expand upon 1 million species being at risk of extinction. Bird, mammalian animal, reptile and amphibian populations dropping by 70% in the last 40 years. Eight million, very visible, tonnes of plastic pollution entering the world’s oceans every year. And a third of all food produced on the planet being wasted between farm and fork, $1 trillion dollar of economic loss, 8 billion tonnes of carbon needlessly emitted.
The growing visibility of these environmental crises and their impact on human life, wellbeing and the functioning of the economy has not gone unnoticed, even in a time of political turmoil. Policy makers, investors and citizens have all, even in the midst of the Pandemic, sent a signal to business that profound, systemic change is required.
- Governments, not just in Ireland, the rest of the EU and the UK but also in China, Japan and South Korea and most probably in the USA are committing legally to the decarbonization of their economies. Farm subsidy systems, again in the EU and UK, are being reformed, imperfectly yes, but with greater expectation of social and environmental benefit. As Treasuries start the long journey to rebuild public finances so they will, rightly, tax pollution of air, land and water more heavily.
- Investors too, having been largely absent from the sustainability debate for decades, have shown a sudden enthusiasm for ESG – Environmental Social and Governance in their portfolios. Driven in part by:
- Government policy – such as the EU’s new taxonomy on sustainability, identifying what any one company in any one sector should be focused on environmentally and socially. Or the UK Government’s recent announcement that all companies with a premium listing will by 2025 have to report publicly on their climate risks as defined by the Taskforce on Climate Related Financial Disclosure (TCFD).
- Transparency – as NGOs benchmark the sustainability performance of financial institutions as much as retailers and brands. For example, Share Action has reviewed the top 75 asset owners in the world, grading them A-E with over 50% getting a D or E.
- Reputation – many ethical investors were exposed to the Fast Fashion brand Boohoo not spotting what many in the industry knew, that human rights abuses in Leicester were just as prevalent and bad as any part of South East Asia.
- Disruption – or a sense too that marketplaces are being disrupted profoundly by sustainability. First a power sector and its investors who laughed in 2010 at the likelihood of wind and solar power taking off. Now renewables will overtake coal by 2025 as the main source of electricity on the planet. Similarly a car industry that thought diesel was forever but is now being left standing by EVs and Tesla. A fashion sector that’s having to pivot to respond to the rise of re-sale platforms as people eschew buying new, instead focusing on second hand, longevity, repair and rental
- Citizens too are asking business to #BuildBackBetter post the Pandemic. Yes we want our nights out and holidays back but there’s also a sense that people want a calmer, cleaner, more locally connected future too and that what they consume should become very much more sustainable too.
- Finally, technology breakthroughs are giving us the tools to generate, manage and interrogate the trillions of datapoints associated with the environmental and social footprint of consumption. The millions of shops, factories, farms, fisheries and forests around the world and the multiple impacts that need to be monitored and managed.
Triangulate these trends and you see the next decade is not like the last. It’s about profound and systemic change to the sustainability of every aspect of our lives. It’s about winners and losers. At a national, sector, company and farm level.
We are no longer in a world where a company’s approach to social and environmental issues is defined by what I would call corporate social responsibility (CSR). A bit of risk and reputation management. Some philanthropic giving. To be a gold standard company today, to be merely a bronze standard company 5 years hence you now have to put sustainability at the very heart of everything you do.
M&S and its 100-point sustainability plan - Plan A - taught me that this integration effort is significant but it’s also doable. Doable because it boils down to answering just three questions:
- WHY do we need to become sustainable?
- WHAT do we commit to do to become more sustainable?
- HOW do we integrate sustainability into all we do?
The WHY is all about developing the right commercial strategy. One that’s based on insight. Thinking about what the trends I’ve just summarised mean to you. At M&S it was about expanding the definition of the word QUALITY. The word that best describes the company to virtually all of its customers. We sought to broaden the definition of quality beyond the functional, the button won’t fall off, to the emotional, care for nature and people. In a world of Tesco, Walmart and Amazon, we could never win on price, nor on a 20th Century definition of quality, now largely a marketplace norm. We had to carve out a new one relevant for new expectations.
We also used Plan A to solve another strategic challenge for the business – culture change. We had become too insular, too siloed and too risk adverse. Plan A forced us to look outwards, be bold and to work as one team.
Looking to the future this integration of sustainability into strategy will only accelerate as we have to respond to the disruptive marketplace pressures I’ve spoken about. I see DSM (once Dutch State Mines) and its high tech food nutrition and animal feed business doing this. Orsted (once Danish Oil and Natural Gas) become the world’s largest wind power business. Unilever differentiate its brands from low cost private label competitors.
Now let me mention the WHAT, the engine room of sustainable business. The climate, water, waste, human rights targets. Plan A showed that setting targets, however bold and well defined, was just the start of sustainable change. We also had to create a project management machine second to none to drive the implementation of these targets. A governance system to create accountability for delivery, to track progress, address problems but also to capture the business benefits of sustainable change – a net £750m of savings over 10 years. Finally we had to deliver re-assurance to the outside world that we were delivering on our commitments. A good report, independently assured and challenged by an External Advisory Board kept positive pressure on throughout lots of short term business challenges.
Now generally if companies are poor at the WHY and average at the WHAT they are decidedly poor at the HOW. Integration is all. It’s what makes many of today’s gold awardees different. It’s where the rubber hits the road, in an electric kind of way. It’s where the grand boardroom strategy and NGO loved targets become hard reality. It’s where you engage your:
- Employees – not just making them proud to work for a good company but listening to their challenges and ideas to drive continuous, sustainable improvement.
- Suppliers – where yes you need clear compliance and audit as exemplified by Origin Green but you also need to help unleash their creative juices to find better ways of making things. And yes you need to recognize that much of the reason for them being unsustainable is due to how you treat them and make decisions.
- Investors – showing them clearly how more sustainable practice is creating value for them. Recruiting, motiving and retaining talent. Driving down costs. Building resilient operations and supply chains. Maintaining trust with customers, communities and policy makers. Above all future proofing your business as markets pivot towards a more sustainable offer.
- Sector – we will only individually become sustainable if we all collectively become sustainable. Challenges such as climate change are too large for any one company to solve alone. We all participate in a flawed, unsustainable system that only collective change will correct. The British Retail Consortium has recently developed a road map to Net Zero Scope 1, 2 and 3 (supply chain and consumer use) carbon emissions by 2040. Individually an impossible target but collectively the great challenges of low carbon farming, refrigeration, food waste and deforestation can be addressed successfully.
So even if today you have achieved gold status still ask yourself, can I truly answer the WHY, the WHAT and the HOW of sustainable business.
This is particularly relevant for the food and farming sector. It’s responsible for about 20% of all greenhouse gas emissions on the planet, much of the adverse land use change, biodiversity loss and plastic pollution. Its associated with the growing risk of pandemics leaping from the natural world to humans. Unhealthy diets and malnutrition, human rights abuse and a lack of fairness in how risk and reward is shared along value chains.
None of this is new but it is much clearer now.
This is why Bord Bia was so prescient in 2012 in creating Origin Green to help future proof the entire Irish food and farming sector.
And I stress the word entire. In most countries there is a relatively small pack of voluntary leaders on sustainability and then a very long and very large tail of poor performers.
Ireland has a world class food and farming sector which today, on a relative scale, is a leader on sustainability.
And it’s great that today we are able to look beyond this high minimum standard and celebrate those Gold Standard companies who have gone the extra mile too.
Well done all of you. To lead today is to show exemplary foresight and commitment.
But I want to finish with a warning too.
As I’ve outlined we are barely in the foothills of the sustainable change that we need.
For Ireland to prosper economically, socially and environmentally in the next decade it must build upon all its achieved to date and create a truly sustainable food and farming system.
Be clear such a sustainable food system is not 10% different from today’s, it’s very different.
Not just in terms of the environmental and social proof points it delivers - Net zero, 100% sustainable raw materials and circular, committed to equality, fairness and wellbeing.
But also in how it looks and feels to all those who participate in it.
A farmer who can be paid fairly to produce high quality food but also paid to farm carbon and generate renewables on their land.
A food factory powered by 100% renewables, that wastes nothing and has a motivated, healthy workforce.
A food customer who knows their food has not just avoided harm but made a positive difference to nature and society. That wastes nothing and sees all the packaging that ends up in their kitchen reused or recycled
And an Irish nation that can be proud and reap the economic benefits of having the world’s most sustainable food system.
We should not believe that we have a choice in failing to deliver this. Sustainable alternatives exist if you falter. In other countries. In other production systems such as vertical farms and lab fermented proteins. In the personalization of diet.
Build confidently on all you’ve created to date and you can and will prosper collectively.
Congratulations. Keep well. And above all keep pressing for positive, sustainable change.