Sustainability at Monsanto: Oxymoron?

Monsanto, known and sometimes criticized for their role in the proliferation of genetically modified crops in the US and the world, has released their 2010 Corporate Social Responsibility (CSR) report. The company, accused by some as "poisoning the world's food supply," monopolizing the seed market and even contributing to rural suicides in India, is lauding their sustainability efforts. Having greatly increased food production in much of the world, the company argues they are reducing hunger and providing a greater livelihood for farmers. The following is a brief analysis of their report.

As members of the UN Global Compact (UNGC) they elected to build their report around the Global Reporting Initiative (GRI) which has become a standard for reporting due to its simple, self-assessed and standardized approach. Monsanto chose to use the GRI guidelines, but elected not to officially report to GRI or receive any external assurance on their reporting. Given the lack of 3rd party verification, some readers will question the claims in the report. Just like a building that can be built to LEED standards without certification, a report doesn't have to be 3rd party verified to be true. However, the independent assessment shows stakeholders that a company has committed to sustainable progress and transparency and we don't have that assurance here. To their credit, Monsanto does report on a solid 44 total performance indicators, 33 of which are considered "core" indicators by GRI. It's a good start.

Monsanto indicates in their GRI G3 Index that they are reporting on 15 of the 25 total environmental indicators. They go into some very good detail on their consumption and output assessments regarding energy, water, waste and emissions, including their progress over the prior 3 years. Some of these numbers are quite impressive. They've reduced their energy consumption, water use, water waste (discharge), emissions and raw materials consumption overall from 2007-2009 (all of those except for water saw an increase in 2008 but a decrease to below 2007 levels in 2009). Strangely, and without any explanation beyond the graphed metrics on an efficiency scale, they show efficiency decreases in every category measured, which include energy consumption, raw material consumption, direct GHG emissions, indirect GHG emissions, fresh water consumption, chemical oxygen demand (greatest decrease in efficiency), acidification emissions, eutrophication (phosphates to surface water), photochemical oxidant creation (VOCs), and waste shipped offsite. None of these metrics are explained and no reason is given for the decreases in efficiency (or increases in inefficiency, depending on how you read the graphs), some to below the 2000 benchmark levels. However, the level of transparency is refreshing, though clearly incomplete.

With that said, there is room for improvement in Monsanto's next CSR report.

One of the primary issues with this report is the definition of sustainability that Monsanto relies on to set the parameters of their intentions. They make it clear that the single most important thing they have to accomplish - for sustainability - is to increase crop yields. Increasing yields of the staple crops of corn, soy, cotton and canola is vital, since they repeatedly emphasize that the yield of these crops will need to double by 2030 in order to keep up with the projected 9 billion Earthlings that will inhabit the planet by then. These statements are followed by the claim that they will increase these yields while simultaneously decreasing crop impact on land use, water use, energy use, soil loss and climate per unit of production.

It is hard to argue with this approach, after all they are considering human sustainability and meeting the needs of future generations. Human sustainability is central to their report; they highlight individual farmers, special projects in developing countries, and often refer to growing populations. They also talk extensively about philanthropic efforts, including the donation of 130 tons of hybrid corn and vegetable seeds to Haiti after last year's devastating earthquake. However, there are many in the sustainability realm who would argue vigorously with Monsanto's definition of sustainability. A truly transparent report would acknowledge how this definition differs from the norm and why.

The biggest elephant in the room of this report was the fact that those business practices which cause the activists so much grief went largely unmentioned. CSR reports are at best transparency documents, and it's difficult to trust a report that ignores negativities and lauds positive impacts, including framing certain unsustainable practices as "responsible," like increasing yields through monoculture. The stakeholder engagement section of the report, which spans 10 pages, fails to mention any type of engagement with the groups who oppose or are negatively affected by their practices. This section discusses their philanthropic efforts and some good projects, like protecting biodiversity in sections of Brazil and partnerships with organizations like The Nature Conservancy and the Audubon Society on conservation projects in the Mississippi River basin. These are all laudable activities and rightly celebrated in this report. But to include these examples and not mention how Monsanto has (or has not) engaged with stakeholders that have been directly hurt by their control over the seed market, actions that have elicited attention from US Attorney General Eric Holder and concern from the Obama Administration, is missing much of the purpose of CSR: that of transparency.

There are a few GRI indicators that specifically reference negative impacts: number and volume of spills or incidents of non-compliance with environmental regulations; incidents of regulatory non-compliance regarding product responsibility (health and safety, labeling, marketing and fines levied); incidents of non-compliance and anti-competitive behavior regarding society. None of these issues are addressed in the report. The GRI G3 index of these indicators refer the reader to the company's 10-K form, a 187 page financial document filed with the SEC - not exactly the easiest form to sift through to find indications of non-compliance. This information should be summarized in a CSR report.

The report is heavy on commitments, many of which are impressive and commendable. Their efforts are highlighted by a number of case studies on specific projects, including efforts to increase cotton yields in Burkina Faso by 30% while reducing pesticide use by 50%, as well as a program to reduce waste and water use at a French supplier. They discuss at length their efforts to help developing countries answer agriculture challenges, and they rightfully extol their efforts to reduce child labor within their supply chain around the world, especially in India where they reduced the percentage of child labor from 20% in 2004 to 0.15% in 2009.

They do a commendable job breaking down their commitment to the UN Global Compact Principles and what they are doing to achieve and satisfy the principles. While their commitments are rather vague, so are the principles, and this is one of the first times I've seen this type of breakdown in a report.

All in all, we're pleased to see Monsanto continuing their participation in the CSR report fray, despite the fact that their reporting practices could use some work.

Readers, what do you think? What's the best path to sustainability for a monolith like Monsanto?