agbalancetm - oecd 3 frank ppt final... · strikes and lockouts functional characteristics...
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AgBalanceTM
From sustainability assessment to continuous
improvement
Markus Frank, BASF SE
OECD BIAC Workshop, Paris / Apr 24, 2013
Sustainability in agriculture
Creating value in various agri-food value chains
2
Off the farm
production
and working
funds
Agricultural
production Consumer Processing
End consumer
industries Retail
Sustainable production
as a consumers
expectation and value
driver
Value chains respond to
sustainability need
Translation into market
dynamics
Ingredients
Sustainability in Agriculture
Philosophy of AgBalance
Sustainability is an imperative
and thus brand relevant in the
agri-food value chain
Managing sustainability is a
source of innovation,
differentiation and therefore
business opportunities
Sustainability is a journey, not
a destination – continuous
improvement as an ongoing
effort
You can only manage what you have measured
4
AgBalance Method Development
Measure sustainability in agriculture
Eco-Efficiency
Sustainable
Agriculture
Holistic method for life cycle
assessment in agricultural and
food value chain production
processes
Helps to make informed
decisions on how to manage
improvement
Independent assurance of
functionality and coherence
received by
AgBalance™
5
The Engine Room of AgBalance
Entire Value Chain in the Focus
Prechain Agriculture Downchain
AgBalance
Life Cycle
Assessment (ISO 14040-44)
Social Impact
Assessment (UNEP-SETAC)
Ag-specific
Indicators (Biodiversity, Soil,
Land use)
Total Life Cycle
Costs
6
Comprehensive data as
a profound basis for clear
statements
SUSTAINABILITY SCORE
Society
Economy
Ecology + -
Dimensions
Water use
Biodiversity
Land use
Soil Energy
consumption
Emissions
Macro
economic
Fixed costs
Variable
costs
Consumer
Local &
national
community
International
community
Future
generation
Farmer/
Entrepreneur
Resource
consumption
Eco-toxicity
potential
Categories Subsidies
Maintenance/
General repair
GVP
Farm profits
Seed
Soil preparation
Insurances Labour
Investment
Crop protection
Fertilization
Machinery
Deprecations
Soil compaction
Soil erosion
Eco-Toxicity Farming intensity
Crop rotation
Potential for
intermixing
Renewable
Energy
Greenhouse
gases
Acidification
potential
Ozone depletion
potential
Photochem.
ozone creation
potential
Water emissions
Solid waste
Assessed total
water use
State indicator
Agri-
environmental
schemes
Nutrients balance
Eco-Toxicity
potential
Abiotic resource
depletion
Non-renewable
Energy
Air emissions
Gender equality
Access to land
Residues
in feed & food
Unauthorized /
unlabeled GMO
Fair trade
Trainees
Social security
Association
membership
Professional
training
Imports from
developing
countries
Wages
Risk potential
Toxicity potential Integration
Wider economic
effects
N-surplus
Soil carbon
balance
Actual
Agricultural area
Assessed total
area (prechain)
Wages/salaries
(prechain and
downstream
chain)
Strikes and
lockouts
Functional
product
characteristics
Other risks Employment
Qualified
employees
Employees
Part time workers
Family support
R&D
Capital
investments
Foreign direct
investment
Child labour
Other fixed costs
Protected areas
Toxicity potential
(Farmer)
Indicators
Life Cycle Impact Assessment (LCIA)
Aggregation & Weighting
Factor Societal Factor Relevance Factor n Calculatio
Why do partners engage in AgBalance?
AgBalance is supposed to help them…
Increase their efficiency and therefore profitability
Differentiate from their competitors in the
marketplace
Better address their (customers„) customers„ needs
Increase the marketability of their produce
Build alliances along the value chain and with
important influencers, e.g. NGOs, political bodies
Bring their sustainability agenda to life
AgBalance Case study
Soya, Corn & Cotton Production in Brazil
8
Cerrado Biome
AgBalance™ Objectives & Reference:
Understand the sustainability drivers in the
soya, cotton and corn production chains,
identify best practices & areas for
improvement.
Functional Unit: 1 average cultivated hectare in
two farms, Panorama (BA) and Planalto (MS),
taking the 2009/10 crop year as a basis.
Processing Retailer Disposal
8
Off-farm
production of
Preparation
Input
Cultivation Harvesting Storage/
Transport
Processing Retailer Disposal
These life cycle steps are not considered,
since they are equal for all alternatives
Planalto farm, MS
Panorama farm, BA
Sustainability Performance
Single Score & Dimensions
9
Planalto: better general performance in
the three dimensions
Panorama: better performance in a few
individual indicators, e.g. professional
training, integration of disabled people
and conservation areas
Focus should be on the optimization of
the environmental dimension in
Panorama
Panorama (BA)
Planalto (MS)
AgBalance™
From highly aggregated single score to detailed information
~ 40 %
10
Fertilizer
Fertilizer production and use of fertilizers
represent high environmental burden
Planalto is more efficient in the use of
nutrients, especially phosphorus
Pesticides
More cotton production at Panorama
requires more pesticide use
Organophosphate insecticides comprise only
2 % of total pesticide volume but result in
approx. 70% of environmental impact (i.e.
ecotoxicity potential)
Panorama (BA)
Planalto (MS)
Sustainability Performance
Environmental Dimension
AgBalance™
11
Biodiversity
Panorama has 25.3% agro-forests, Planalto
has 22.8%;
Panorama: worse on-field ecotox footprint,
mainly due to the use of organophosphate
insecticides in cotton production
Soil
Planalto shows a lower risk in erosion related
to the lower percentage of sand (21%
against 71%), and higher percentage of no
till. Panorama (BA)
Planalto (MS)
Sustainability Performance
Environmental Dimension cont‟d
AgBalance™
Scenario Analysis
Predicted impact of improvement strategies
12
Adaptation of fertilizer regime without
loss of productivity
Adaptation of the fertilizer regime to
establish nutrient balance would result
in savings of:
14,811,595 kWh (energy equivalent
to the consumption of 2,073
households/yr.)
7,990 tons CO2e (equivalent to 1
truck (14 t) travelling ~ 150 times
around the globe)
AgBalance™
Change in the transportation mode
logitcislogitsilogistic
Switch from road to rail transport could
at Panorama result in environmental
and social benefits:
Saving 2,808 tons CO2e
(equivalent to 1 truck (14 t) driving
~ 53 times around the globe)
26% reduction in transport
accidents
Scenario analysis as a guardrail for continuous improvement
Conclusions & Caveats
13
AgBalance™
AgBalance™ was designed to assess
sustainability in the entire agri-food value chain
and to give guidance for improvement programs
Tradeoffs and decision making in their light are
the focus of AgBalance™
Transparency and stakeholder engagement are
critical – highlight the limitations of the methods
To pave the way for a “Green Growth”, intense
collaboration along the value chain is necessary