Sowing the Seeds of Sustainability: Uncovering Reporting’s Impact in AAF sectors

“Workers in these meat plants have incredibly high rates of carpal tunnel syndrome, but the meat industry has figured out a way to hide these rates from the public” - Alice Driver, Civil Eats

My team and I, as part of the Sustainable Investment Research Consulting Project, are currently working on establishing a correlation between sustainability performance and sustainability reporting in the agriculture, aquaculture, and fisheries industries (AAF sectors, which include meat production as well). Our focus is on assessing whether reporting practices are correlated with performance improvements in environmental and social outcomes. This performance is being measured through five case studies of a mix of companies and cooperatives across North and South America.

Purpose and Motivation

For our team, the project provides unique insights into exploring the impact of sustainability reporting frameworks on actual performance, aligning with our professional interest in ESG and sustainability. The deeper we delve into our research, the more the project excites us and affirms our decision to pursue it. We have encountered surprising instances where reporting appears to be making a mark while simultaneously concealing darker truths. For example, the quote that began this blog revealed how an AAF company deployed on-site nurses to assist workers in the meat industry. However, this action appeared to be motivated less by a genuine concern for worker welfare and more by an attempt to prevent incidents from becoming reportable OSHA injuries. This approach seemingly aimed to manipulate their safety statistics, raising questions about the true intent behind these practices. Conversely, there are cases where we did not expect measurable improvement. For example, a small-scale aquaculture cooperative in South America, despite having limited resources for extensive sustainability reporting, was successfully implementing innovative water conservation techniques and community engagement initiatives.

Questions Then and Now

As we began researching our project, we focused on questions posed by our client: Does reporting on sustainability actually lead to better outcomes? Are companies' sustainability improvements attributable to reporting, or are they influenced by other underlying factors? If reporting is not making a difference, what might be the reasons for this?

Beyond the client’s questions, our methodology posed its own set of considerations. We deliberated on which criteria to select, initially focusing on environmental metrics like soil health and water usage as key sustainability indicators. The inclusion of social metrics was also debated. We aimed to ensure the chosen criteria were not only relevant but also material to the companies and the sector in assessing sustainability performance.

While company selection presented its challenges, we established specific parameters to narrow our focus. We sought companies with larger market capitalizations, primarily involved in production but also engaged in processing and manufacturing if possible. Our geographical scope encompassed the US, Canada, and Latin America, targeting the Agriculture, Agribusiness, and Forestry (AAF) sector. We also prioritized companies with extensive, long-term data availability. Despite the large number of companies doing sustainability reporting in North and South America, even in the AAF sectors, these filters effectively narrowed down our scope to a handful of companies. It is interesting to note that we encountered an unexpected hurdle with Canadian firms. In response to recently enacted anti-greenwashing legislation, many AAF companies in Canada significantly reduced the scope of their reporting. The resulting documents were often vague and aspirational, complicating our ability to identify suitable candidates from this region.

We had our fair share of iterations and discussions surrounding criteria selection. The question of whether to maintain the same criteria but with different performance metrics merited careful consideration. Our current methodology, which included selecting companies based on size and relevance to the agriculture sector while incorporating both environmental and social indicators, provided a comprehensive framework. However, the challenge lay in identifying measurable, quantifiable criteria that allowed for meaningful comparisons across companies.

The use of third-party databases and government agency reports for data verification was a strength of our methodology. However, it also raised questions about data reliability and consistency across different sources. We critically examined whether these external sources provided a complete picture or if there were inherent biases or limitations in their data collection methods. For instance, we noted that the World Benchmarking Alliance often provided circular information sourced directly from the companies' sustainability reports.

Prioritizing criteria was another area requiring careful analysis. The challenge of balancing comprehensive criteria with data availability was significant. It forced us to question whether we were potentially overlooking crucial aspects of sustainability due to data constraints. This dilemma highlighted the tension between ideal assessment and practical limitations.

The concern about patent criteria potentially hiding crucial information was particularly thought-provoking. The voluntary nature of much sustainability reporting created a risk of underreporting or selective disclosure, especially regarding sensitive issues like labor rights violations or environmental inefficiencies. This raised ethical questions about the reliability of company-reported data and whether our methodology inadvertently rewarded companies that were more adept at reporting rather than those truly excelling in sustainability practices.

We observed that companies appeared more willing to report on food security initiatives, often focusing on donations and partnerships. This suggested a potential bias towards easily achievable, public-facing initiatives over more challenging systemic changes. This trend warranted deeper analysis—were we inadvertently incentivizing superficial sustainability efforts over more impactful, long-term changes?

The persistent issue of data availability, particularly among cooperatives and smaller organizations, emerged as a significant limitation of our current approach. It raised questions about the representativeness of our analysis and whether we were inadvertently favoring larger, more resource-rich companies that could afford comprehensive reporting. This bias could lead to an incomplete or skewed understanding of sustainability practices across the sector.

Consulting Experience

As we progressed through our sustainability reporting project, we found ourselves honing the art of explaining complex topics in a way that was clear to stakeholders. This involved regular communication with our team and external stakeholders to clarify methodologies and justify our selection criteria.

We discovered that design thinking and particularism made a difference. PowerPoint presentations are a core tool in consulting work, and the ability to distill complex information into clear, structured slides is a crucial skill. We learned that creating a successful consulting presentation involved more than just delivering content; it required organizing information in a way that flowed logically and was easy for stakeholders to follow. This meant building a narrative that moved from problem identification to potential solutions.

Conclusion

In conclusion, the project has been a learning experience both in terms of consulting and understanding the complexities of sustainability reporting. The challenges we encountered—like data availability and the difficulty of measuring certain criteria—are a reflection of the larger issues in sustainability reporting. However, this work will contribute to refining the standards that companies follow and ultimately improve sustainability performance in AAF sectors​.