Australia’s agribusiness leaders pursue collective approach on ESG standards

Agribusiness leaders will strive for a collective approach on ESG standards to unlock capital and drive investment, says Elders boss Mark Allison.

Mark Allison, chairman of Agribusiness Australia.

The nation’s agribusiness leaders will strive for a collective approach on environmental, social and governance standards to unlock capital and drive investment, with a parallel focus on protecting the future of rural communities, following a meeting of the industry’s biggest investors and businesses.

Speaking to The Australian at the close of the Agribusiness Australia CEO Summit on Tuesday, Elders chief executive Mark Allison said discussions homed in on the key themes critical to advancing the agribusiness sector.

“It was quite eye opening and very, very positive,” said Mr Allison, who is also chairman of Agribusiness Australia.

“The overwhelming view is that on ESG for agriculture and agribusiness, we haven’t actually articulated the progress across water management, environmental management or biosecurity work across the climate change initiatives that have been put in place.

“The group is aligned to the net zero target concepts, and needs, we believe, a collective view across the broader industry, rather than by commodity.”

This would be a shift from the status quo that currently sees each segment separately commit to climate and sustainability goals.

“So we concluded that a collective approach across agribusiness, with consistent single-minded targets and views and a commitment to the overall reductions is where we want to be,” Mr Allison said.

This approach will be taken alongside the current target for the industry to expand to $300bn a year by 2030, a goal it is confident it can reach, according to the Elders CEO.

“There’s overwhelming optimism in terms of the ag industry hitting the $300bn target while making a sustainable contribution with strong ESG standards.

“And it’s fascinating: every company around the table clearly has its own plans and commitments, but as an industry, it was the first time there was a consistent, single agribusiness voice with a collective position.”

The other major discussion point around climate change and ESG centred on Australia’s rural communities, he added.

“Local community implications (of climate targets) were also significantly debated and discussed, with the belief that, again, we need to have a single and consistent view on how to ensure the enrichment of regional and rural Australia.”

Alongside the ESG focus, the persistent labour challenges facing the industry in the wake of Covid was another hot topic at the meeting, which brought together the 30 largest and most influential leaders in agribusiness.

“In the short term the view was we need to reconsider all of the options in terms of an enhanced workforce,” Mr Allison said.

“Clearly there’s the migration issue and visa issues, including agricultural worker visa issues.”

Agribusiness leaders also called for a greater automation and artificial intelligence push to fill repetitive roles with machines and make greater use of human capital, he added.

While ESG and labour challenges were identified through a 2021 survey as the big issues facing the sector, he cautioned inflation and supply chain headwinds would come into focus in the coming year.

“It’s not an immediate (concern). If you look across the commodities, the winter crops being planted now, all of the inputs for that were brought into Australia three months ago. So supply chain issues are likely to emerge over the next 12 months in terms of inputs and global transport.”

Mr Allison’s comments came as agribusiness banking specialist Rabobank warned of the flow-on effects of China’s strict lockdowns on its trading partners, including Australia. The bank’s general manager for Australia and New Zealand, Stefan Vogel, warned Beijing’s attempts to eradicate Covid would lead to disruptions to freight logistics, Chinese corn plantings, dairy demand and hog pricing.

Reduced dairy demand from China, alongside Oceania’s record dairy prices, were a double hit for Australia and New Zealand, Mr Vogel flagged.

“Dairy demand in food service is slowing in China while, according to our calculations, dairy products in China produced from imported Oceania whole milk powder (WMP) are more expensive than those from locally produced dairy for the first time in eight years,” he said.