As a leading merchant and processor of agricultural goods, our work helps to feed and clothe millions of people every day by bringing products from where they are grown to where they are needed. As we do so, we observe climate change posing increasing risks – not only in our own operations, but also across our supply chains and the broader agricultural system.
We sat down with Jan Christoph Kabath, our Global Head of Sustainability & Energy Transition, to discuss the climate-related risks facing our business, the actions we are taking to help shape a more resilient food and agricultural system, and the solutions and partnerships we are forging across value chains to address climate challenges for the benefit of current and future generations.
Q
Tell us about the path that led you to your current role at LDC?
A
After joining LDC in 2010 as a graduate trainee, I was given the opportunity to work in many different roles and geographies, gaining broad exposure to our business. From leading growth markets in Asia and Africa to the strategy for Grains & Oilseeds globally, I saw firsthand the critical role that LDC plays in global supply chains.
This triggered my interest in the systemic challenges facing our food and agricultural system, and I invested time to study these at the Cambridge Institute for Sustainability Leadership. And looking at our industry from a systemic angle reminded me how fundamentally our business depends on nature!
Sustainability is therefore a strategic enabler and a matter of long-term resilience for our Group. I see my role as an opportunity to combine my commercial and leadership skills with passion for the field, in pursuit of goals that can propel our business forward and support our commodity value chain partners today, while helping to ensure the resilience of the wider system we all depend on, over the long term.
Q
Is there evidence that climate change is increasingly impacting agricultural systems?
A
Absolutely there is. To merchandize the millions of tons of agricultural commodities we handle every year, we study weather patterns closely to predict future supply. Over the last decade, our data shows an increase in extreme climatic conditions such as rising temperatures, frequent weather changes, flooding and droughts – all of which impact crop production.
We also work closely with suppliers and farmers, from smallholders in Africa to large-scale farmers in the US, who share with us their detailed, firsthand experience of the effects of climate change.
The initiatives we’re introducing across our various business lines that seek to mitigate these effects are part of broader climate strategies seeking to build climate resilience into our own business and supply chains, while working with others on shared solutions to transform the broader food and agricultural system.
Q
Can you elaborate on LDC’s actions and initiatives to build resilience to climate change?
A
The first step in addressing risk is to understand it. At LDC, we expanded our data science capabilities to gain more detailed understanding of how long-term weather and climate trends affect our operations and supply chains.
Our teams developed a climate transition plan which includes measurable and timebound targets to reduce greenhouse gas (GHG) emissions – both from our operations and in our supply chains, with a detailed roadmap to 2030 that lists all decarbonization measures, their abatement impact and implementation timing.
Our longstanding work to ensure deforestation- and conversion-free sourcing across our product lines advances conservation efforts while helping to preserve natural ecosystems that underpin agricultural stability, thereby strengthening climate resilience across our value chains. Across our value chains, we also invest in adaptation measures to support farmers in their transition to regenerative agriculture practices that can help future-proof agronomic systems, with a focus on improving and restoring nature, while sustaining farm productivity and profitability. These encompass agricultural practices that seek to simultaneously deliver positive benefits to soil, water, biodiversity and climate, while enhancing on-farm resiliency. We work with tens of thousands of farmers worldwide in this sense, analyzing their practices and empowering them to improve these, including through farm-level programs in Africa, Asia, Latin America and North America.
The emission reductions that stem from our farm-level regenerative agriculture programs resonate strongly with growing customer demand for lower-carbon commodities and, ultimately, contribute to food and agriculture value chain decarbonization. Our understanding of land-use patterns, farm-level practices and how to improve the carbon profile of the commodities we source allows us to bring measurable and verified value chain emissions reductions to market, starting our action where the food system begins: at the farm level.
Fundamentally, value chain emissions are a shared challenge that must be addressed through collaboration, transparency and sustainable solutions between key supply chain participants, in order to drive lasting positive impacts at scale. I believe LDC is uniquely positioned to bring those stakeholders together to help build resilient systems that can meet ever-increasing demand for agricultural goods.
Q
Could you give us some examples of the low-carbon commodities that you source?
A
A good example is our work to shape a more sustainable coffee value chain through the Stronger Coffee Initiative, which aims to transform coffee communities by restoring soil health and mitigating climate change through coalition-led investments. This supports the production of low-carbon coffee and, ultimately, downstream customers’ climate goals.
We’ve also established partnerships to advance cultivation of low-carbon soy, following regenerative agriculture principles that have delivered carbon reductions and improved soil health. And we’re working toward sharing our product-specific emission factor as ‘branded data’ in the Global Feed LCA Institute database, to provide data granularity that can be used by feed manufacturers and their downstream customers in their carbon footprint calculations.
Another good example are the various collaborations we have in progress to promote camelina cultivation in South America, as a low-carbon feedstock for both high-protein animal feed and advanced biofuels production, reflecting LDC’s commitment to support the global energy transition.
Q
Can you share insight into LDC’s activity in relation to global carbon markets?
A
Many companies are working hard to avoid and reduce emissions where possible. However, there will always be residual emissions that cannot be avoided or reduced – and that’s where the carbon market comes in.
LDC has been active in the voluntary carbon market since 2021. Our global portfolio of avoidance and removal carbon credits has a strong focus on nature-based projects (such as reforestation, afforestation and regenerative agriculture), and delivers a host of biodiversity and community co-benefits.
By trading carbon credits with organizations, both within and beyond our value chains, LDC facilitates their efforts to meet their environmental and social impact targets.
We believe our added value is two-fold. Firstly, we bear upfront commercial risk by investing in carbon projects early, providing the initial investment needed to generate credits. Secondly, our understanding of carbon projects, methodologies, measurement and issuance processes allows us to select high-integrity projects and work with developers to manage issuance and delivery risk. Ultimately, this expertise provides buyers with the confidence they need to include carbon credits in their sustainability strategies.
Carbon credits appeal to our existing customer base – from food and beverage companies to textile and fashion companies, but also increasingly from sectors with no direct link to our value chains, as a means of meeting sustainability targets through nature-based solutions. For example, we are currently working with tech companies, airlines, energy majors and other companies with hard-to-abate emissions to build bespoke carbon credit portfolios that align with their environmental and social impact strategies.
Q
Are you optimistic about the agriculture sector’s potential to help solve increasingly urgent climate challenges?
A
The rapid evolution of sustainable farming practices and the emergence of nature-based solutions gives me confidence. We see more options today that can be implemented and scaled to make our agricultural system nature positive, toward a more resilient food system that enables us to continue providing sustenance for a growing population.
As I mentioned, tackling climate challenges requires, above all else, collaboration. That’s why working with partners worldwide and across value chains is key to support and finance the transition to nature-based solutions and, ultimately, mitigate climate change impacts from agricultural production. With guidance and support, our farming system can lever native vegetation and soils to sequester carbon and help restore habitats and ecosystems, while supporting agricultural community livelihoods.
LDC is committed to working in this sense, continuing to expand our knowledge and capabilities, investing in and embracing new technologies, and working with our partners to scale shared solutions as the shoots of change that are needed to build more resilient food and agriculture supply chains over the long term.
