ESG stands for Environmental, Social, and Governance. It’s a way to measure and report on how a business operates responsibly and sustainably.

• Environmental looks at how your farm manages natural resources, energy use, emissions, and impacts on the land.

• Social focuses on your people and community, including worker wellbeing, safety, and community engagement.

• Governance covers the systems, policies, and practices that keep your business transparent, ethical, and accountable.

Not at all – ESG has a long history going back over a century. While the term “ESG” was coined in 2004, the ideas behind it have been developing since the 1890s:

• 1890: Quaker Friends Fiduciary avoids ‘sin’ investments.

• 1960s – 70s: Social movements force companies to consider social issues; the first responsible investment fund is launched (Pax World Fund), and shareholder advocacy begins.

• 1980s: Events like Chernobyl and the Ozone hole raise awareness of environmental risks, while business ethics and Corporate Social Responsibility (CRS) discussions emerge.

• 1990s–2000s: The UN Environmental Program, COP conferences, the Kyoto Protocol, and initiatives like the Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP) start shaping ESG practices making lowering emissions and the environment a shared responsibility. 

• 2004: The term ESG is formally introduced in the ‘Who Cares Wins’ Report, alongside the launch of the Principles for Responsible Investment (PRI).

• 2010s – present: ESG becomes mainstream, with frameworks like the UN SDGs, Paris Agreement, Taskforce on Climate-Related Financial Disclosures (TCFD), and Global Reporting Initiative (GRI) standards guiding reporting.

Source: The Sustainable Agency – A Brief History of ESG.

As the supply chain increasingly adopts ESG reporting, growers are expected to participate.

Good ESG reporting will help your business:

• Respond to regulatory changes

• Demonstrate social licence

• Maintain a good workforce

• Improve decision making.

Are you considering bringing investors into your business? Are you considering working with government on a program or project? Are you considering a bank loan? ESG reports are being sought from these entities as an indicator of business performance.

Global governments and corporations have committed to sustainability targets. Even if your farm hasn’t signed up directly, supplying into these chains means your practices contribute to those goals.

Rather than the targets being attributed to each individual business, targets are collective, meaning meeting them is the responsibility of the entire supply chain rather than just of the singular entity.

Although government, big multi-nationals, and corporates may be the ones who have signed up to these lofty goals, any entity in their supply chain has, by association, now signed up to the goal too - ESG has become the world’s biggest team sport!

EXAMPLE

A grower supplies produce to a processor. Although the processor is based in Australia, the investors in the processing company are based in the US.

This global company has decided to sign up to the SAI Platform as a silver level member. SAI is a global food and drink value chain initiative for sustainable agriculture constituted in Geneva. 

This now means the Australian grower supplying the Australian processor is now also signed up to achieving the commitments under this SAI silver level arrangement.

Maintaining market supply and meeting buyer expectations are the main benefits. ESG reports can also support investor engagement, bank loans, or government programs.

This is a global initiative signed up to by governments and corporates across the world.

Globally the targets and goals are in place and the pressure to achieve them is already well and truly on its way down the length of all supply chains. We can’t stop the push down – but we can start the push up!

Reporting isn’t mandatory yet; however, we are already seeing market access being heavily impacted.