A Natural Progression: From ‘Sustainability Reporting’ To ESG

Not too long ago, companies that aimed to establish a leadership role in corporate sustainability reporting were mainly focused on environmental issues. More recently, the meaning of sustainability has broadened into ESG: Environmental, social, and governance reporting. This integrated approach can be challenging, but for some companies it is the inevitable result of their efforts in the environmental field, as illustrated by the leading fertilizer firm The Mosaic Company.

Environmental sustainability as a starting point

In its simplest terms, a fertilizer company’s relationship with its customers is purely transactional: The company supplies the nutrients, and farmers grow the food.

For Mosaic, though, the relationship extends far beyond the initial exchange.

“Mosaic is a fertilizer company, so we have long viewed sustainability as an essential piece of our business and an imperative for ourselves and our stakeholders,” explains Natali Archibee, sustainability manager at Mosaic.

In other words, environmental sustainability is just one part of a holistic community web that is affected by Mosaic’s core business. The global ESG movement has provided the company with an opportunity to draw more corporate resources into its sustainability efforts.

“Our emphasis had been on sustainability, meaning that the targets and performance improvements had been on environment,” Archibee says. “Now the expectations are shifting, and this approach is more representative of our business.”

From subsistence to surplus

The fertilizer sector is characterized by energy and water intensity, but these challenges also provide opportunities.

For example, Mosaic promotes the science-based “4R Nutrient Stewardship” best practices model for fertilizer application, enabling farmers to increase yields while reducing environmental impacts.

As practiced by Mosaic, the 4R program also supports no-till farming, the use of cover crops, and other conservation strategies that support local communities. Through improving farmer profitability, the impacts of 4R can ripple out to impact the economic, environmental and social health of the entire community.

Those impacts come into clear focus when applied to subsistence farming, notes Archibee. She cites the company’s “boots-on-the-ground” approach as a factor in the ability of local communities to move from bare subsistence to surplus.

“It is really important to share best practices, and 4R is a great example of efforts extend beyond the four walls of a company, and reach into value chain,” she explains.

ESG as a natural outcome

In the context of the 4R program, the transition from environmental reporting to ESG comes into sharp focus. Mosaic has positioned the 4R program as the vehicle for sustaining the use of fertilizer through an equal measure of economic, environmental and social benefits.

The company’s Villages program in India illustrates how that framework can involve the community holistically, beyond the fields.

The Villages program focuses on food security for smallholder farmers, whose yields are often far below that of large producers.

Mosaic launched the Villages project in 2008, in partnership with its nonprofit foundation and India’s sustainable development nonprofit organization, the Sehgal Foundation.

The project provides equipment and guidance for farmers to practice Krishi Jyoti, which translates into “enlightened agriculture.” In practice, that means an integrated approach to agriculture, water conservation and education.

Since launching in 2008 the program has grown from two villages to 60, encompassing 40,000 people and more than 16,000 acres of crops.

So far, the project has increased yields among participating farmers by 20 to 30 percent, while helping to restore local water tables and provide a healthier environment for children’s education.

A web of community relationships

Another stepping-stone to ESG occurred in 2013, when Mosaic entered into a partnership with the U.S. wildlife conservation organization Ducks Unlimited and the trade group USA Rice.

The so-named Rice Stewardship Partnership extends the focus of the 4R program to emphasize wildlife habitat as well as energy efficiency, water conservation and nutrient management.

The partnership, which also involves significant input from the U.S. Department of Agriculture, involves ensuring that rice fields provide wintertime habitat for waterfowl and other wildlife after the growing season. Dry conditions and declining aquifers have made it imperative for rice farmers to adopt new water conservation measures, so all stakeholders benefit through the partnership.

In just six years, the partnership has engaged more 13 percent of all the rice acreage in the U.S.

Of the 390,000 acres managed within the program, 27,000 acres are also practicing a new water conservation approach that saves water and improves water quality while also reducing greenhouse gas emissions.

Maximizing the good

With the transition to ESG reporting, Mosaic can apply its experience in community well-being to employee wellness and other areas. It can also zero in on areas of challenge, including energy and water intensity.

“It’s not only about investments. It’s also about impacts where we have operations,” Archibee explains. “A company like Mosaic has the responsibility to make a positive impact. The ESG model allows us to understand and minimize those impacts and maximize the good. It all comes back to mission of helping the world grow the food it needs.”

The lesson for other companies is clear: the world of commerce is transitioning to a more holistic model - and adopting an integrated approach to sustainability is the key to long term growth.

Environmental reporting is a good start, but it is just one step in a journey that is more complex and challenging, but also more rewarding – for a company’s employees and external stakeholders alike.

Don’t forget: Later this month, we’ll be hosting 3BL Forum: Brands Taking Stands – What's Next, October 29-30, at MGM National Harbor, just outside Washington, D.C. Natali Archibee of Mosaic will join an onstage discussion exploring how ESG must integrate all departments of a company, including investor relations, human resources and communications.

We're pleased to offer 3p readers a 25 percent discount on attending the Forum. Please register by going to the 3BL Forum website and use this discount code when prompted: NEWS2019BRANDS.

Image credit: Tobias Greitzke/Unsplash