Olam International pairs sustainability and financial reporting for the first time
Agri-business supplier Olam International has announced cuts to carbon intensity and water usage in its own operations in a sustainability report that has been merged with its annual financial report for the first time.
Olam has recorded a 29% reduction in its operational carbon footprint compared to 2015 alongside a 31% improvement in operational irrigation and water intensity.
The latest iteration of the sustainability report has also been coupled with Olam’s annual report, to reflect on the “interdependence of economic, social and environmental performance”.
Olam’s chief executive Sunny Verghese said: “The macro changes that the world is experiencing have long-term implications for how businesses are led, organised, managed and financed. At Olam, we must continue to maximise shareholder value while pursuing a purpose-driven model, providing consistent transparency, advancing sustainability and engaging with an ever-broadening community of stakeholders.”
The company’s revamped approach to sustainability reporting will coincide with the introduction of science-based targets for carbon emissions and water. Targets with a 2020 timeframe are in the process of being developed and could be announced later this year.
Olam’s water footprint for 2016 was 82bn m3 and despite the operational reduction, total value chain water intensity increased by 1.6% compared to 2015. The increase was attributed to greater volumes of perennial crops that consume more water, such as coffee and cashew.
The company has aimed to implement the Alliance for Water Stewardship Standard across all supply chains in medium to extremely-high water risk locations. The company will continue to manage low-to-medium risk sites across its 70 operating countries through the ISO 14001 standard.
Olam’s 29% carbon reduction was driven by “upstream productivity” and a carbon positive agenda at plantations in Gabon. However, across processing, carbon intensity of scope 1 and 2 emissions increased by 52%. This has been attributed to eight new processing facilities made through the ADM acquisition in 2015, and the Brooks peanut shelling acquisition of 2016.
Olam introduced new initiatives in 2016 to tackle broader sustainability issues. More than 65,000 smallholders are now registered on the Olam Farmer Information System to boost transparency in the supplier network.
The organisation has worked with the World Resources Institute to identify high-risk mill and implement time-bound targets relating to palm oil. Olam reduced its palm oil supplier base from 48 in 2015 to 14 in 2016.
In September, Olam assisted in the launch of the Global Agri-business Alliance, a coalition of 36 businesses, to tackle environmental and social challenges affecting agricultural supply chains and rural communities worldwide.