Transition Intelligence for the agri-food sector.
The agri-food sector is a significant driver of climate change and biodiversity loss. At the same time, the sector faces substantial challenges from more frequent and extreme weather events and the degradation of ecosystem services. This is leading to global supply chain disruptions and food insecurity.
Through our end-to-end Transition Intelligence solution following a modular three-step process, we enable each stakeholder in the supply chain to transition towards resilient and sustainable agri-food systems.
A modular three-step process.
Risk Analysis.
In a first step, we conduct a systemic assessment of physical risks linked to climate change, biodiversity, and transition risks associated with a move towards a global economy within planetary boundaries. The focus of the analysis lies on evaluating impacts and dependencies regarding these risks under several socio-economic scenarios.
Transition Pathways.
In a second step, we develop a tailored set of adaptation and mitigation solutions. These pathways are strategically devised to address the identified risks, thereby fostering resilience and reducing vulnerability to environmental and socio-economic changes. Moreover, the identified pathways align with science-based climate and biodiversity targets alike.
Impact Assessment.
In a third step, we perform a holistic impact assessment that goes beyond financial analysis. It also captures additional benefits, including ecosystem services and social benefits. This assessment provides a systemic view of the outcomes resulting from the transition pathways, highlighting the broader positive impacts on the environment and society.
Benefits.
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Risk Mitigation: Identify and address climate change, biodiversity, and sustainability risks, ensuring business continuity.
Enhanced Resilience: Implement tailored transition pathways to withstand environmental and economic challenges.
Financial Gains: Increase revenue, reduce costs, and capitalize on sustainability opportunities.
Ecosystem and Social Benefits: Preserve ecosystem services, improve community relations, and enhance worker well-being.
Competitive Advantage: Stand out in the market by appealing to eco-conscious consumers and investors, ensuring long-term viability.
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Operational Compliance: Seamlessly meet evolving environmental and sustainability regulations, reducing the risk of penalties and legal issues.
Risk Mitigation: Identify and address climate change, biodiversity, and sustainability risks, ensuring regulatory compliance and business continuity.
Operational Resilience: Implement tailored transition pathways to enhance the sector's resilience while aligning with regulatory requirements.
Cost Efficiency: Optimize processes to fulfill regulatory standards, leading to cost savings and increased operational efficiency.
Product Innovation: Comply with regulatory mandates for sustainable practices, meeting consumer demands for eco-conscious products and driving market growth.
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Sustainable Sourcing: Ensure products meet regulatory and consumer demands for sustainability, enhancing the appeal of goods.
Risk Mitigation: Identify and address climate change, biodiversity, and sustainability risks, ensuring regulatory compliance and business continuity.
Supply Chain Resilience: Implement tailored transition pathways to bolster supply chain resilience while aligning with regulatory requirements.
Operational Efficiency: Optimize operations to meet regulatory standards, reducing costs and ensuring efficient delivery to consumers.
Market Leadership: Comply with regulatory mandates for sustainable practices, attracting ethically-minded consumers, and differentiating products in the market.
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Risk Management: Assist clients in mitigating climate change, biodiversity, and sustainability risks, ensuring compliance with evolving regulations.
Investment Opportunities: Identify and support sustainable agri-food businesses, aligning with regulatory requirements and market demand.
Responsible Financing: Facilitate sustainable practices and investments that fulfill regulatory obligations and drive environmental and social impact.
Diversification: Offer diversified portfolios, including sustainable agri-food assets, to reduce risk and enhance returns, in line with regulatory expectations.
Market Leadership: Promote investments that comply with regulatory mandates for sustainability, attracting investors seeking responsible financial solutions.
FAQs.
How many indicators do you cover in the Risk Analysis?
Currently we cover around 160 indicators. This extensive number ensures that we cover all relevant factors that are relevant for agri-food systems from a systemic perspective. Most importantly, it greatly helps to minimise potential blindspots.
Does that mean that the Risk Analysis covers all relevant risk categories for reporting frameworks such as the TCFD (now merged with the ISSB), TNFD, and the European CSRD and SFDR?
Yes, this is correct.
Can you explain a little bit more regarding the scenario analysis?
We generally look at three distinct scenarios - Business as Usual, Middle of the Road, and Sustainable Development. From a global warming perspective, these scenarios represent three plausible futures given current and planned legally binding and non-binding actions by member states of the Paris Agreement. The warming trajectory is based on the IPCC SSP marker scenarios. However, we enrich these scenarios by - for example for the Sustainable Development scenario - developing the environmental-socio-economic nexus in such a way that it represents the specific actions that need to be taken to achieve both climate and biodiversity targets alike. The IPCC SSP marker scenarios are very much focused on emissions only, thereby neglecting important factors when developing scenarios (both for Risk Analysis and Transition Pathways) for specific sectors.
I am an agri-food company and I have set a Scope 3 target according to the SBTi FLAG Sector Guidance - can you help me devise strategies to achieve my set targets with your Transition Pathways?
Yes, we can do that. Our Transition Pathways are specifically designed such that stakeholders in the agri-food sector can start to work on their emission reduction strategies right away by means of an actionable set of solutions specifically designed to address their unique challenges in this context.
Can you say a little bit more about the specific outcomes from the financial impact analysis from your Impact Assessment?
This process is two-fold. In a first step, the identified risks have to be quantified. Put simply, this means that the intensity of a specific risk (e.g. drought) is estimated for a specific asset (e.g. single crop). This is done for the aforementioned scenarios. Hence here you can understand the impact on revenues, the impact on asset valuation, and how this impacts your financial bottomline. In a second step, the risk reduction potential of the identified solutions is assessed and what the costs are to implement them, yielding a simple cost-benefit diagram. From this you can understand which solutions are most cost-efficient to address the identified risks.
Can you say a little bit more about the broader environmental-socio-economic benefits from your Impact Assessment?
We base our Impact Assessment regarding broader benefits among others on the UN System of Environmental-Economic Accounting to assess ecosystem services. Moreover, of course we also include contributions to targets such as the SDGs. Once again, we strive to provide a complete-as-possible assessment of all potential benefits that are deemed relevant to achieve climate and biodiversity targets alike from a systemic perspective.
