Private sector investment in the production and processing of agricultural commodities is booming, driven by increasing demand and the opening up of new markets. In addition to the opportunities for businesses, the growth in agricultural investment also holds great potential for tackling poverty and supporting socio-economic development in many countries. At the same time, however, there is increasing recognition of the potential for negative social or environmental impacts associated with commercial agriculture, such as ‘land grabbing’, environmental degradation or harmful working practices.
Whether agricultural commodities are being produced for food, materials, cosmetics or biofuels, for companies involved in agricultural supply chains the effective management of social, environmental or ethical risks is increasingly critical to commercial success.
However, agricultural supply chains can be complex. Companies that rely on agricultural commodities for their products can be a long way removed, both physically and in terms of commercial relationships, from the producers of these commodities. Potential risks and impacts can be diverse. Supplier capabilities can vary substantially, even within the same supply chain.
At Kumi we have extensive experience in supporting agricultural commodity businesses in identifying, managing and reporting on social and environmental risks, impacts and performance. Our services include:
- Due diligence support to companies seeking to understand potential risks and due diligence effectiveness in their agricultural supply chains. This may include on-the-ground visits to suppliers or potential suppliers to assess their operations.
- Benchmarking existing policies, procedures and management practices against the recommendations of international standards (such as the OECD-FAO Guidance for Responsible Agricultural Supply Chains).
- Supporting agricultural producers with the design and implementation of policies and management practices that meet the risk management and sustainability requirements of multinational corporation customers or private equity investors.
- Designing and implementing data collection, management and reporting processes that provide oversight over supply chain impacts and performance. This may be stand-alone or integrated into wider company-wide performance monitoring and reporting activities on socio-economic or environmental performance.
- Evaluating the design and effectiveness of sustainable supply chain initiatives, such as on-the-ground partnership projects with NGOs or business-led community investment or supplier capacity building programmes.