Climate Change

Identifying and implementing ways to reduce, mitigate and adapt to the impacts of climate change for Olam and our farmer suppliers

Changing weather patterns are already having profound effects on crops and communities, with agriculture both a cause and casualty. Emissions from Agriculture, Forestry and Other Land Use sectors now represent about 24% of manmade global warming pollution. These emissions come from many sources and processes – the release of nitrous oxide from the use of fertilisers; the release of methane from meat, dairy, and rice production; deforestation as farmers seek more land to increase yields; as well as energy and transport emissions.

As one of the world’s largest agri-businesses, our responsibility is clear. If the issues are not addressed climate change will impact global food security and prevent “the ending of poverty in all its forms everywhere” as defined by the UN Sustainable Development Goals. This is especially important given that all the ‘low hanging fruits’ on agricultural productivity have been exhausted with productivity rises averaging just 1.3% a year between 2001 and 2010, and 0.4% a year over the past 4 years.

Ensuring Olam and our 4.7 million farmer suppliers, the vast majority of whom are smallholders in emerging markets, are implementing mitigation and adaptation measures to both increase resilience and achieve the 2°C goal is therefore integral to our strategy.

 

Preventing deforestation and creating Living Landscapes

Unsustainable conversion or over-exploitation of forests and other natural habitats for food, fuel, fibre and other purposes threatens our natural life support systems, including soil, air, water, all living things, and the global climate, with serious implications for future generations. As stated in our Living Landscapes Policy, the following are unacceptable land use practices which are not permitted in our operations or third party supply chains, and if present, must be eliminated:

No conversion or degradation of critical habitats such as High Conservation Value (HCV) areas and other nationally-recognised conservation priorities.

No conversion or degradation of peatlands of any depth.

No conversion or degradation of other natural habitats with high levels of organic carbon such as High Carbon Stock (HCS) forests.

No use of fire in land preparation including planting and replanting.

Read more about how we are tackling deforestation in Cocoa and Coffee production.

 

In addition to promoting CSA in our own operations and third party supply chains, we are strengthening our commitment to help our sector to mitigate and adapt to the impacts of climate change by taking a role as Co-Chair for the Low Carbon Technology Partnership Initiative for Climate Smart Agriculture (CSA), set up by the World Business Council for Sustainable Development (WBCSD).

Our vision is to make 50% more nutritious food available and reduce agricultural emissions by 50% by 2030. 

Together the LCTPi members focus on 4 priority action areas where we believe we can make the greatest difference:

  1. Building smallholder resilience
  2. Scaling-up investment in Climate Smart Agriculture (CSA)
  3.  Improving businesses’ ability to trace, measure and monitor CSA progress
  4. Implementing agriculture-driven zero deforestation and sustainable land-use commitments.

To help achieve this vision Olam has taken responsibility for chairing Priority Area 1: building resilience among smallholders. This will include gaining the support of other businesses in the sector to:

  • Drive access to finance, including insurance
  • Drive capacity-building through data access, training and investment
  • Create enabling environments 
  • Drive greater awareness of land tenure issues
  • Empower women
  • Develop appropriate tools to support farmers to adopt CSA
  • Develop mass media content and use this for awareness raising and training

Our initial focus in processing has been on carbon fuel energy reduction. One of the ways in which we do this is by using the agricultural waste material as fuel. Some current practices across the group include:

  • Our Vietnam coffee plant uses spent coffee grounds to reduce coal consumption. 
  • In India we use a fluidised bed combustion boiler in our rice processing plant in order to burn rice husk. This resulted in a saving of over 1,000 tonnes of fuel oil each year.
  • Our African mechanised cashew processing plants use steam boilers to burn roasted cashew nut shells using about 50 tonnes of shell consumption per day at full capacity. The shells are also de-oiled prior to use as a fuel, thereby reducing the CO2 and NOx emissions.

We actively seek transport and logistics solutions to reduce greenhouse gas (GHG) emissions. Measures include:

  • Enhancing Service Provider contracts to include sustainability practices
  • Long-term contracting and direct management of more efficient bulk shipping
  • Processing close to source wherever possible e.g. processing cocoa in Africa
  • 'Dark warehouse operations’ allow plants to run with no lighting

One of the key challenges in relation to climate change is to manage uncertainty and risk, hence the need to measure and understand our impact. Olam has been reporting its GHG emissions, strategies and actions to the CDP (formerly known as the Carbon Disclosure Project) for almost 10 years.


In 2017 we received an award for ‘Best performance across programmes’. This award “recognises companies who have responded to CDP’s climate change, water, and forests questionnaires and achieved the best scores across the 3 programmes”.

Accounting for the current and potential financial value of Natural Capital is critical for future-proofing our business in the face of climate change. Our approach on this is being informed by the Task Force of Climate Related Disclosures (TCFD), membership of the Natural Capital Coalition and The Prince’s Accounting for Sustainability (A4S).

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