MORE THAN A BUZZ WORD Why Sustainability Is

If you ask anyone what the definition of sustainability is, you will get a wide variety of answers. In simple terms, sustainability is the ability to maintain at certain level or rate. As a pig farmer, you can wrap your head around investing in technology, management practices, and resources for a sustainable farming future.

As a vital part of the We Care principles, you and your team commit to be the ultimate environment caretakers. You can make good on this promise because you understand that being good stewards of the soil, water, and air is essential to continue to produce food for generations to come.

Still, policymakers, corporate investors, and consumers drive today’s meaning of sustainability to a whole new level – and it is about to impact your farm.

Environmental, social, and governance (ESG) considerations continue to transform today’s business landscape. While ESG scorecards originated in the European Union, U.S. businesses, including your food production partners, are adopting corporate sustainability metrics to be accountable to their customers and beyond.

Often driven by a company’s stakeholders, corporate America’s ESG commitment is more than a passive, check-the-box requirement, however. It’s actively demanding that suppliers take measurable actions on a host of sustainability commitments, priorities, and requirements.

The ESG readiness survey, released by Deloitte in December 2022, indicated nearly three-in-five executives surveyed have already implemented a cross-functional ESG working group tasked with driving strategic attention to ESG. The progress in establishing a cross-functional working group has nearly tripled to 57% since the group was last surveyed in March 2022.

While the recent surge to integrate ESG within a business strategy is driven by the U.S. Securities and Exchange Commission (SEC) disclosure requirements proposed, investors’ and customers’ expectations are influencing the shift from sustainable commitment written on paper to measurable metrics visible for the world to see.

In March 2022, the SEC introduced plans to enhance and standardize climate-related disclosures for investors, as part of a growing awareness of the importance of ESG issues among public companies.

How Esg Impacts Pig Farming

3-IN-5

Executives Implemented Esg Working Group

57% PROGRESS IN ESTABLISHING CROSS-FUNCTIONAL WORKING GROUP

The devil is in the details. The 490-page SEC proposal requires listed companies to not only disclose risks that are “reasonably likely to have a material impact on their business, results of operations, or financial condition,” but also “to disclose information about its direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2),” as well as certain types of GHG emissions “from upstream and downstream activities in its value chain (Scope 3).”

What happens on the farm now becomes the center of the value-chain activities for your food production partner. Can you provide your production partners ESG metrics, outlined by Harvard Law School (refer to blue box), in order to sell pigs?

Although the SEC requirements could possibly be a large threat to your freedom to farm, consumers care about sustainability. The consumer who is most likely to try plant-based products is more aware and makes protein selection based on societal and cultural values.

The recent “Power of Meat” study by the North American Meat Institute revealed that 85% of meat shoppers consider at least one “better for me attributes” — better for me/my family, better for animals, better for the planet, better for farmers/workers — when buying meat.

We know pork checks all the boxes for sustainability — nutrient dense, affordable, planet-friendly, and cultural and societal value. Yet, without real, on-farm sustainability metrics for pork, the aware consumer may opt out of meat eating if he or she does not feel good about the protein source.

IT’S TIME TO ACT

While many factors may drive pig farmers to measure their farms’ sustainability footprint, I invite you to pause and reflect why you should have sustainability benchmarks. As U.S. House Ag Committee Chairperson G.T. Thompson told the Farm Forum hosted by Congressman Warren Davidson (OH-8) in Ohio, “There is no bigger climate defender than the farmer.”

The Next Step

The good news is America’s pig farmers can quantify key sustainability metrics on the farm for free. Already funded by your Pork Checkoff dollars, sign up for the no-cost Pork Cares Farm Impact Reports to assist you in tracking, measuring, monitoring, and reporting the sustainability story of your farm today.

WHAT IS ESG?

As explained by Harvard Law School, environmental, social, and governance (ESG) breaks down into three categories:

• Environmental: energy efficiencies, carbon footprints, greenhouse gas emissions, deforestation, biodiversity, climate change and pollution mitigation, waste management, and water usage.

• Social: labor standards, wages and benefits, workplace and board diversity, racial justice, pay equity, human rights, talent management, community relations, privacy and data protection, health and safety, supply-chain management, and other human capital and social justice issues.

• Governance: corporate board composition and structure, strategic sustainability oversight and compliance, executive compensation, political contributions and lobbying, bribery and corruption.