The EFMD business magazine

The EFMD business magazine

Business schools’ green responsibility: Let’s start at the table!

green operations
Santiago Garcia and Flavio Alzueta address the importance, responsibility and impact of agriculture and food production.

As this year’s Nobel Prize Awarding Committee stated, “Until the day we have a medical vaccine, food is the best vaccine against chaos”. The awarding of the 2020 Nobel Peace Prize to the World Food Program (WFP) of the United Nations is clear recognition of the importance of food, particularly in times of crisis.

The current COVID-19 pandemic has shattered the way of life, health and economies of some entire nations. Yet while many sectors of the economy and industry have been struggling, one sector that remains as resilient as it is necessary is food and agribusiness, an industry that represents $5 trillion globally, providing employment (and livelihoods) to over one billion people, or 28% of the world´s workforce. The importance, responsibility and impact of agriculture and food production does not rest solely on its role as a provider of much-needed animal or human feedstuff. Major environmental consequences result from this activity, with agriculture, forestry and related activities accounting for the use of 40-50% of existing landmass and about a quarter of all human greenhouse gas emissions.

In the face of this context, what are business schools doing? Or, what could they do?

The answer to the first question is, unfortunately, “not very much”. It is true that some universities offer technical or engineering training on forestry, agriculture, land and water management, and related activities. Alongside these specialised technical courses, some business schools also have a very limited selection of agribusiness programmes, mostly at post-graduate level. However, the International School of AgriManagement (ISAM), launched in Spain in 2019, is the first international school fully specialised in this field. Until then, no business school had emerged with the primary raison d´être of developing a highly specialised workforce in the management of vital activities in the primary sector, encompassing agricultural production, land and water management, fisheries and animal husbandry

As for the second question of what business schools could do, we can easily gauge from societal, environmental and economic demands that most of our current challenges and priorities relate to the two broad areas of Securing Increased Demand and Green Operations.

Securing increased demand

According to the Food and Agriculture Organization (FAO) of the United Nations, by 2030 the world will need to feed two billion more people than at present. This reflects an increased demand of 60% above today´s production levels, while at the same time, a record number of 440 million people will be suffering from chronic malnourishment. Business schools must be part of the solution to this challenge, and as educational leaders, we must ensure this issue is a priority. To truly serve society, as most of us pledge in our schools´ mission statements, we must become active solution-seekers in the face of this daunting scenario.

Instead of one radical and overarching solution, the situation may be better tackled through the use of a multi-pronged strategy.

Reducing food waste alone can have a strong impact: according to the FAO, we manage to waste an enormous 1.3 billion tonnes of food each year.

In the US, for example, the journey from harvesting to supermarket shelf sees a total loss of 22% of food production, worth an estimated $400 million, mostly due to poor farming activities, storage and transportation. Reducing food waste also has important collateral benefits: bear in mind that when we waste food, we also waste the water and energy used in growing, transporting, storing or packaging. Furthermore, food in a landfill will only contribute to pollution and rotting, producing methane and thereby exacerbating climate change.

Upcycling is now becoming a trend with strong potential to maximise the use of food. In addition to the obvious advantages of maximising food availability, transforming food waste material (e.g. seeds, peels, etc.) into value-added products has a positive economic impact, estimated at $46.7 billion in the US alone, in 2019. There are also obvious societal benefits in terms of job creation, affordability of food, or environmental health, and our mission here is to act as a catalyst to study and encourage these practices.

Boosting crop yields is another suggested strategy for increasing food availability. Wide use of hydroponic techniques, whereby crops are grown without soil using mineral nutrients, can yield production increases of between threefold and tenfold, while also reducing the lag between harvesting and consumption. In addition to productivity gains, water use may be reduced by up to 90% and the use of fertilisers and pesticides can be minimised as production happens in a controlled environment. Similarly, vertical farming in cities allows food to be produced in reliable cycles and close to the consumer, reducing the carbon footprint as the need for transportation is diminished.

As we can see, the benefits of good agriculture and business practices extend well beyond the table. Although business schools have not been particularly apt at harnessing the moment and concocting winning recipes, current challenges should make us review our priorities.

Green operations

Fortunately, the generations we are currently educating embrace sustainability and the environment as primary responsibilities. These concerns, shared by the European Union, are reflected in the European Green Deal, a strategy articulated with the ultimate goal of making Europe carbon neutral by 2050.

At the heart of the Green Deal lies the “Farm to Fork” strategy, which links with the UN Sustainable Development Goals and as such “addresses comprehensively the challenges of sustainable food systems and recognises the inextricable links between healthy people, healthy societies and a healthy planet”. Under the Farm to Fork strategy, goals are set to (1) Make sure Europeans have access to healthy, affordable and sustainable food; (2) Tackle climate change; (3) Protect the environment and preserve biodiversity; (4) Ensure a fair economic return in the supply chain, and (5) Increase organic farming.
Three specific areas, interwoven among them, are critical for achieving the Farm to Fork goals:

Organic food production remains a fundamental pillar for the health of people and the environment, and to achieve this, the EU has set strict targets for 2030. By then, the use of hazardous chemicals and pesticides must be decreased by 50% while organic farmland must increase to 25% of total cultivated land. Along the same lines, sales of antimicrobials for farmed animals and aquiculture, responsible for an estimated 33,000 deaths in the EU, are to be reduced by 50%.

Paradoxically, long-standing organic food producers actively voice their opposition to such targets, as they see the wider availability of environmentally sustainable and healthy produce as reducing their current competitive advantage as first movers. Understanding the nuances and dynamics of policy design and implementation, even when in principle these are intended for the general good, is a fundamental task and educational institutions should not ignore it.

Improving the Supply Chain is an axis of action that may have huge positive financial and environmental consequences. To produce a chocolate bar in the UK, palm oil is sourced from Indonesia, calcium sulphate from India, cocoa from Colombia/Venezuela, salt from China, milk and wheat from Kazakhstan, sugar from Brazil, and proteins from the US. Reducing carbon emissions and improving financial gains from cargo and route optimisation are two sides of the same coin. For this, the key is careful planning and sharing of transportation networks backed by big data and intelligent systems to ensure on-time delivery, save storage space, and reduce food loss.

In addition to improving distribution, we may also make significant gains by universalising good practices in automatisation, sorting, manipulation, storage and packaging. Whereas in North America a total of 22% of food is lost during the phases of handling and storage, processing and distribution, this figure raises to an eye-watering 57% in Sub-Saharan Africa.

Soil Protection alone can be a major game-changer for radically improving health and the environment. Severely degraded soils due to deforestation, monoculture, tiling, and heavy use of fertilisers result in desertification and a decrease of land productivity. According to the UN, 74% of people living under the poverty line are affected by soil degradation.

In addition to the obvious environmental benefits of using soil as a natural CO2 sink through photosynthesis, there are financial gains to be had by the deployment of green practices that go beyond the obvious one of obtaining premium prices for ecological produce. Issuing CO2 reduction certificates derived from environmentally-friendly farming practices offers responsible farmers financial benefits while doing good, since the sale of these carbon bonds in the international carbon market may constitute an additional source of income.

As we can see, the benefits of good agriculture and business practices extend well beyond the table. Although business schools have not been particularly apt at harnessing the moment and concocting winning recipes, current challenges should make us review our priorities. There are economic and societal gains to be had and as such, we must be, if not acclaimed chefs, at least qualified cooks able to teach students how to put together the right menu, wisely combining financial gains and sustainable practices so we can serve up a better future for all.

At Rennes School of Business we have decided that this matter is of critical importance. Planting the seeds for this better future, we contributed to the goals laid out in this article by designating Agribusiness/Agrifinance, as well as the Green Supply Chain, as two of our areas of research excellence. To complement this expertise and bring knowledge to the ground (pun intended), we have become the academic founding partner of ISAM, the world’s first International School of Agri Management. The seeds are sown for a better future for all.

See you at our table? Food is on us!

See more articles from Vol.15 Issue 01 – ’21.

Santiago Garcia, Ph.D. is Vice President for Strategic Development and International at KEDGE Business School, France and Distinguished Professor at the International School of Economic and Administrative Sciences (EICEA) of the Universidad de La Sabana (Bogotá, Colombia).

Flavio Alzueta is President of the Advisory Board and a founding partner of ISAM

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