Measuring and communicating sustainability: ‘The biggest challenge right now is the pace of change,’ says Ingredion VP
Speaking to FoodNavigator-USA after partnering with HowGood – billed as the “world’s largest sustainability database” – Ingredion’s VP of corporate sustainability Brian Nash said things are getting better when it comes to measuring and communicating environmental impact, but it’s still a work in progress.
“If somebody came in tomorrow and said, ‘Here's your one standard for greenhouse gas accounting, for biodiversity, for regenerative ag, that would make life infinitely easier, but we don’t have that, which is why Ingredion defaulted to using an external standard [Ingredion works with the Sustainable Agriculture Initiative (SAI) platform] because at least it gives us a starting point for a conversation with a customer and it’s not just the Wild West.
“SAI Platform's Farm Sustainability Assessment (FSA) acts as a baseline, and then we figure out where the business needs to go on top of that.”
‘What customers are asking for is evolving dramatically’
So what are customers asking for?
“What customers are asking for is evolving dramatically,” said Nash. “If you asked me right before the pandemic, I’d have said the most common topic would be sustainable agriculture, followed by ethical sourcing, followed by environment. Ask me again today, the questions are infinitely more complex and I would say environment is now in the driver's seat, which I attribute to the rise in the adoption of science-based targets.
“Priorities vary by customer but in general there's a baseline level of sustainability that's entering into the game, so when we're doing RFPs for business, they want you to demonstrate that you've had a human rights audit. Is the crop sustainably sourced? If you're not checking those boxes, don't even bid for the business.”
Scope three emissions data: ‘It's all in the evolutionary stage’
When it comes to scope three emissions, which the GHG Protocol Corporate Standard classifies as indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions, he said, “everybody wants to talk about how can we work somewhere in the supply chain together to reduce greenhouse gases or carbon emissions?”
But when it comes to the data, he said, “It's all in the evolutionary stage. Some companies could have dozens of analysts looking at this, but it's still going to be estimates. There are 15 different categories of scope three emissions, and they are extremely hard to get estimates pinned down.
“We had to get a consultant to help us with ours to make sure we were doing the math right because it's so complex. At the end of the day, we have better estimates this year than we did last year. But they're still estimates.”
He added: “There are companies moving to get better data, but it's going to require more than just an individual company effort. It’s going to require platforms and it could require regulatory changes that require companies to report into those platforms. This is going to continue to evolve through 2030 and beyond.”
‘I think you're probably going to see even the non-publicly-traded companies impacted by the SEC proposal’
One thing focusing minds is an SEC proposal that would require all registrants to disclose scope 3 emissions. While it only applies to companies that must register with the SEC, said Nash, “I think you're probably going to see even the non-publicly-traded companies impacted by this proposal if it happens because the consumer-facing companies are going to want that information anyway, so I think we’re all going to get pushed into the same boat.”
Unsurprisingly, the proposal has attracted a tsunami of comments, he said, highlighting both the difficulties in sourcing the necessary information, but also the reporting timetable. “If you have to file in February it’s really difficult to get your end-of-year emissions in and get them validated in that timeframe. We’re still getting utility bills in late January and early February for the previous December.”
The sustainability org chart: ‘I've always been an advocate of having people out in the business and not all just some large corporate group that's doing everything’
So how is sustainability organized at Ingredion?
“We're actually fairly lean in the corporate group,” said Nash. “There's myself and two people who work for me in corporate sustainability, and we've got a small team in the operations group focused on environmental impact.
“But we also have a global sustainability council of about 18 leaders in the organization, both functional leads as well as regional business leads, and that's the mechanism we use to drive this throughout the business, so you've got people from human resources, innovation, all the decision makers in the room.
“So when we talk about working with suppliers and ethical sourcing, that's getting integrated through operations and procurement; it's not my team working on it in isolation. I've always been an advocate of having people out in the business [living and breathing sustainability] and not all just some large corporate group that's doing everything because I think it's a better way to just kind of weave it into your DNA.”
Do environmental and business goals always align?
When it comes to incentives, much of the time sustainability and commercial goals naturally align as say, using less water or energy saves money. But environmental goals are also built into overall corporate targets, said Nash. “Our CEO has big goals and some of the sustainability goals for each year get rolled into that and disseminated out across the business.
“So for our science-based targets, we have a target for 2022 of a level of reduction we want to get to, and that gets pushed out to the regional businesses and outdoor operations so that everybody's working towards that uniform target. Same thing with sustainable agriculture: all the different sourcing areas and each country have their own targets.”
Shifting goalposts and lines in the sand
The biggest challenge right now is the sheer pace of change in sustainability, said Nash, “not just because it's a drain on resources, but because it makes it very difficult to go to an executive team or a board and say, ‘This is the pathway we need to walk down,’ because we can set our own targets, and then a customer comes in and says, I want everything made with renewable energy, so the rapidity of change is impacting our ability to make decisions.
“So sometimes we have to draw a line in the sand, and if a customer comes along and wants something different, we look at that as part of the commercial discussion.”
Marketing Sustainability: ‘We're not marketing a Ferrari and talking about how fast it is, it's about are we going to be a transparent company that's going to be a partner to our customers?’
When it comes to marketing sustainability, he said, “It’s about telling an honest story. We are far from perfect in this space, but we're trying to say here's what's most material in terms of sustainability and here are the numbers to be transparent so that people can go back year on year and say, Okay, well, the water data is getting better.
“A lot of marketing sustainability is not traditional marketing where you’re going out there saying, ‘We're the best and here's why…’ We're not marketing a Ferrari and talking about how fast it is; it's really about are we going to be a transparent company that's going to be a partner to our customers?”
He added: “If the SEC reporting [requirement for scope 3 emissions] goes through you'll see that get refined and structured maybe a little bit more, but if companies are using frameworks to tell their story and putting it in context, I think that's about the best you can expect right now.”
HowGood partnership: ‘Sustainability is not pulling one lever and saying: Okay, check’
All of which helps explain Ingredion’s decision to work with sustainability database co HowGood, which measures multiple attributes from GHG emissions and water use to biodiversity, soil health and labor practices, said Nash. By the end of 2022, the environmental and human impact of 50 Ingredion strategic growth platform ingredients will be made available to the industry via HowGood, he explained.
“Sustainability is not pulling one lever and saying: Okay, check. It’s not like my customers are saying ‘AlI I care about is a lower carbon footprint. You can't ignore human rights. Nobody wants low carbon footprint stevia made with forced labor.
“So that's I think what HowGood brings to us. It looks at an ingredient or a product level across eight different sustainability attributes including labor, and it gives you a scorecard or, or a balanced perspective so you can see all the trade-offs [he notes for example that certain regions of China can produce better stevia yields, but the trade off is forced labor concerns].”
So how does it work?
In the case of, say, pea protein, he said, “HowGood draws from hundreds of databases and builds generic profiles for say a pea protein out of North America versus a pea protein out of China, so a CPG company can go in and say, Well, my pea protein comes from China and get a HowGood-system-generated result. Now that we have put our data in there, companies using HowGood could swap out that [generic pea protein] ingredient for an Ingredion pea protein and see how that impacts the scorecard.”
(Read our interview with HowGood here.)
Ingredion’s sustainable sourcing goals
Ingredion has a goal of having 99% of its global supply of crops (by volume) sustainably sourced by 2025, and 100% of its Tier 1 crops (corn, tapioca, potato, stevia and pulses), according to the definitions laid out by the Sustainable Agriculture Initiative Platform’s (SAI Platform) Farm Sustainability Assessment (FSA), which benchmarks performance against 90 global standards.
“A lot of our food and beverage customers are members of the SAI Platform already, and so years ago, we adopted that as our standard because it leveled the playing field for us,” said Nash. “That said, the phrase ‘sustainably sourced’ does get used generically and a lot of our large customers have their own definition.
“At the end of last year, we were a little over 33% sustainably sourced [by volume]. Our internal target is to be double digits higher than that by the end of this year, which we're on track for and it's just a process of continuing to evaluate what are the needs in each of the different geographies where we source crops and work with the growers to address the gaps.”
Tapioca: Ingredion currently sources most of its tapioca from Thailand where it works the Thai Tapioca Starch Association, the local government, some agricultural universities, on a model farmer program, whereby train farmers are trained in better agricultural practices from better application of fertilizers to integrated pest management, to better planting practices, getting access to better quality seed, or better on-farm management practices, said Nash.
“The primary benefit [to the farmers] is yield: if you increase the yield you increase the revenue. During the pandemic we also deployed an app that allows us to disseminate information to growers, so for example, somebody sent in a picture of Mosaic crop disease and we were able to take that picture and push it back out to all the growers saying if you see it in your field, here's what you need to do.”
Waxy rice: Here Ingredion works with the Sustainable Rice Platform (SRP), which says that on average, farmers certified to SRP standards used 20% less water and generated 50% lower greenhouse gas emissions.
Pulses: Here Ingredion primarily sources from North America, said Nash. “There are always areas for improvement on things like planting cover crops or pollinator flowering crops at the end of fields. We’re looking at how do we overall make the farms in our supply chain more climate resilient.”
Stevia: “Stevia is really interesting in that the most fertile region for growing it is in a part of China associated with human rights allegations and forced labor, and we have a lot of customers that do not want crops sourced from these areas,” said Nash. “So we look to source outside of that area in other regions in China where we might get slightly lower yield.
“The first step has been to get growers validated under the SAI Platform and now it’s about how can we work with farmers to enhance yields, so that could be more efficient water usage, better application of fertilizers and so on.”
Corn: “In the US we grow a lot of specialty corn, which can be organic or non-GMO or hybrid and those growers tend to use precision agriculture so they’re reading a field and deciding how much water needs to go where, and trying to expand those practices, along with some regenerative practices out to other growers, is the next evolution for us,” said Nash.
“And then you contrast that to say Pakistan, where water tends to be the rate limiting factor, so we've worked to install drip fed irrigation with growers which has improved yields by over 35% just by more efficiently using water.”
Image credits: Ingredion
Interested in sustainability measuring, reporting, and communications?
Tune into the morning session of day three (Nov 17) of our upcoming Futureproofing the Food System summit, which will explore everything from greenwashing to ‘regenerative ag’ claims, and features Ingredion’s senior manager, sustainability Andrew Utterback, and HowGood’s director of growth & innovation João Brites.
THE CIRCULAR ECONOMY: What does Sustainable Sourcing Really Mean? (11am- 12.45pm Central time, Thursday November 17)
PANEL: The climate smart roadmap… Pretty much every food & beverage brand now makes some kind of appeal to the consumer about its green credentials, spanning everything from ‘carbon-neutral’ and ‘sustainably-sourced’ to ‘climate-friendly,’ ‘water-positive,’ ‘regeneratively-farmed’ and ‘zero-waste.’ But how do industry buyers – and consumers – assess these claims, make meaningful comparisons between products in the same category, and stay alert to the ever-present threat of greenwashing?
- João Brites, director of growth & innovation, HowGood
- Jeremiah McElwee, chief merchandising officer, Thrive Market
- Matthew Hayek, assistant professor in the department of environmental studies, NYU
- Andrew Utterback, senior manager sustainability, Ingredion
- MODERATOR: Elaine Watson, senior editor, FoodNavigator-USA
Presentation: Decoding Sustainability with Andrew Utterback, senior manager sustainability, Ingredion
PANEL: Sustainable packaging… from recyclable to compostable to re-usable, to edible packaging What progress is the industry making on reducing the environmental impact of food packaging, and what needs to change within industry or at a regulatory level to make this happen?
- Christine Yeager, director of sustainability, Coca-Cola Company North America
- John Hewitt, VP Packaging and Sustainability, Consumer Brands Association
- Sadrah Schadel, co-founder and CEO, No Evil Foods,
- Anne Greven, Global Head of Food and Agribusiness Innovation and the FoodBytes! platform, Rabobank
- MODERATOR: Liz Crawford, deputy editor, FoodNavigator-USA
To find out more about this FREE event, which is sponsored by EpiCor postbiotic (Cargill), IFF, Ingredion, Cargill, and FoodBytes! By Rabobank, Amano Enzyme, Evergrain (ABInBev), Spoonshot, and Exberry by GNT, and supported by Oat Vita, click on the links below:
