LDC helps to feed and clothe the equivalent of 500 million people around the world each year. You might not have heard of us. We are not directly involved in either farming or in the final sales to consumers.
But for a wide range of goods – from coffee through to cotton and wheat – we play a critical role in getting basic agricultural goods from farmers’ fields through to the final consumer. Like an optic fiber that connects consumers, producers, and the markets.
Our unique position throughout the value chain comes with big responsibilities too. And with the vision for being a trusted merchant for the 21st century, LDC wants to leverage its influence to contribute, as innovatively and efficiently as possible, to global sustainability efforts.
We see that task as a responsibility but also as an opportunity.
And while governments are still figuring out the implementation of the Paris Agreement on climate change, the agricultural industry, including LDC, is moving forward regardless.
For us, climate change presents a mixture of commercial imperative, social responsibility, and major business risk. We simply cannot ignore it.
As a business, our challenge today is to adapt to the changing preferences of consumers for more sustainable production and to limit the impacts of climate change on our business.
Our industry has no choice but to adapt.
Population growth poses a monumental challenge for agribusiness companies. As climate change complicates production, the global demand for food is set to double by 2050. We will have to produce as much food in the next 30 years as we produced in the last 8,000 years put together.
Meanwhile, expect more constraints to emerge. How will we meet demand for water? How much of our land will be degraded? How will we cope with the loss of precious biodiversity?
For some commodities, our work on climate change can be seen as a simple reaction to the markets.
Take palm oil, an ingredient in about half the items in your local supermarket, from lipstick to pizza to chocolate. As consumers understand the potential links between palm oil production and deforestation, their preferences for deforestation-free palm oil have grown. Meeting this demand has not been easy, but technological progress means we can now trace most of our palm oil to mill level. And by the end of this year we expect nearly 100 percent of our palm oil to be traceable in this way.
Coffee is another example, with scientists warning that climate change could cause global production to drop by as much as 50 percent. LDC does not own any coffee plantations, but we’re helping farmers to adapt because we want and need them to keep supplying the highest quality coffee for years to come. We plan to do more of this type of work in the future.
From cutting our own emissions, helping farmers to adapt and working with freight operators to find solutions for sustainable development for their industry – we are not just a neutral observer. As a business, our core task is to supply the needs of society. That is how we make our profit.
Social business interests
As it turns out, our commercial interests overlap with social interests in many ways.
When we work with farmers, boost their production, lift their profit, we are giving them more reason to stay in farming rather than moving to cities in search of a better life. Our interests can and should, in the long-term, contribute to social stability and prosperity.
Like any other large business, a key task for our management is to identify and manage long-term risks. Climate change is clearly one such risk. And in this, we are not alone. We do compete with other companies in our sector. But we are all moving in the same direction.