LTS International - part of the NIRAS Group - has researched the practices of ten consumer goods companies in the soy value chain, highlighting sustainability issues and offering recommendations to companies and investors.
Over the past 20 years, the soybean market has more than doubled to a value of $123 billion annually, with soy emerging as one of the world’s most important agro-commodities. However, this rapid rise in economic importance has come with a suite of negative impacts. Soy production is strongly linked to deforestation, ecosystem loss, increased greenhouse gas emissions, social displacement, and the problematic aspects of genetic modification.
Indeed in its latest report on Climate Change and Land, released on 8th August, the Intergovernmental Panel on Climate Change highlighted the critical role of sustainable land management in the fight against climate change.
Soybean was among the agricultural commodities the report called out as having "driven profound landscape transformations… contributing to increased deforestation rates and associated GHG emissions".
Bespoke research and practical recommendations
In this context, LTS International - a member of the NIRAS Group - recently completed a bespoke research assignment on the key sustainability issues in soy production.
The research was commissioned by Stewart Investors - part of First State Investments - a global asset management firm with more than USD$143bn assets under management - on behalf on their clients.
LTS International examined the approach of ten consumer goods companies in the soy value chain to these issues.
Project Manager Danny Smith commented: “As part of the research, LTS along with our client Stewart Investors sought to engage directly with the companies on their strategies to the sustainable sourcing of soy, understanding their approaches, and suggesting practical findings and recommendations for them to implement. In LTS and NIRAS our aim is to engage in a constructive dialogue and thereby contribute to a meaningful change in companies, and to support them in their contributions to achieving the SDGs.”
Seven key areas in soy sustainability
The findings identified seven key areas of focus for companies in soy sustainability, and drew the following conclusions:
- Landscape conservation – deforestation, loss of biodiversity, habitat destruction, and land use change are significant environmental concerns in soy production, particularly in South America where the Amazon and Cerrado regions are now specifically protected under international agreements for soy.
- GMOs, water and agricultural inputs – genetically-modified organisms (GMOs) are a growing concern in the soy market due to their association with higher rates of application of herbicides or pesticides, unknown potential impacts on human health, and threat to local biodiversity.
- Waste and outputs – environmentally damaging outputs, such as greenhouse gas (GHG) emissions or waste management concerns like non-recyclable packaging, are significant issues in the consumer goods sector.
- Land and community rights – issues around land grabbing, exploitation of local peoples, and community engagement are critical issues in soy production and a core principle of the Roundtable for Responsible Soy (RTRS), a multi-stakeholder initiative which aims to facilitate a global dialogue on soy production that is economically viable, socially equitable and environmentally sound.
- Labour and governance - payment of fair wages, provision of necessary training, and quality health and safety standards should be used at every step of the soy value chain, from farm to factory, particularly with recent accusations of worker exploitation and even slavery in some soy plantations.
- Sustainability leadership – corporate engagement with international, regional, and national agreements as well as initiatives and certification standards is too low, and large consumer goods companies should be striving to promote greater market-wide practice.
- Supply chain and traceability – due to the nature of the crop, traceability of soy is highly challenging but with growing concerns around GMOs and zero-deforestation value chains, it is an increasingly important objective.
NIRAS’ partnership approach to achieve SDGs
Global focus is turning increasingly to sustainable land management as a critical factor in achieving SDGs 12 (responsible consumption and production), 13 (climate action), and 15 (life on land) in particular.
NIRAS sees engagement and partnership with a variety of stakeholders on these issues - including investors, financial institutions and the private sector – as significant, particularly in the complex global supply chains of agricultural commodities such as soy.
Download the summary report here.