NYU Stern Center for Sustainable Business and HSBC Bank USA Launch Framework to Drive Investment in the Food and Beverage Sustainability Initiatives, Maximizing Impact and Financial Returns

HSBC Bank USA, in partnership with NYU Stern Center for Sustainable Business (CSB), today announced the release of the Food and Agriculture Sustainability Strategies Framework. Grounded in the ROSI (Return on Sustainability Investment) methodology developed by CSB, the unique framework helps sustainability and financial leaders within food and agriculture companies make the business case for sustainability initiatives that will deliver both financial value and positive societal impact.

The unique ROSI methodology works by improving decision-making, valuation, and internal communications by helping companies go beyond ESG reporting metrics to truly understand where value exists within sustainability strategies and investments.

HSBC funded three key projects with Anheuser-Busch, Hero Group and Ingredion, to inform the food and agriculture framework, in addition to learnings from previously completed ROSI projects with Arca Continental, Cargill, Mars, McCormick, McDonald's, and Natra. The projects highlighted the importance of a thorough analysis of the opportunities and risks associated with implementing sustainability practices across supply chains and company functional areas.

The research identified the following twelve sustainable strategies mapped across the food and agriculture value chain along with practical suggestions for how to calculate the associated returns across the supply chain:

1) Improving water security
2) Ensuring protection of biodiversity and ecosystem conservation
3) Improving nutritional profile of food products
4) Improving soil health
5) Raising and treating animals with respect and care
6) Adopting sustainable packaging solutions
7) Mitigating and adapting to climate change
8) Incorporating circularity into food waste management
9) Investing in employee and supplier well-being
10) Reducing the use of harmful chemicals
11) Implementing sustainable sourcing
12) Investing in sustainable brand marketing and communications.

Initial results from the findings include:

• Anheuser-Busch (AB) found nutrient management best practices for barley improves AB operating efficiency, reduces Scope 3 carbon emissions, and leads to enhanced brand value. ROSI results show benefits amounting to ~$40 million in 10-year NPV and an average annual operating income improvement of ~$7.5 million.

• Hero Group found that promoting sustainable bee-friendly farming practices improves fruit pollination and yields, reduces input costs for growers and leads to carbon sequestration benefits for achieving Scope 3 targets. A 10-year NPV of €3.6 million (before costs) was estimated with an average annual operating income impact of €650K.

• Ingredion USA’s Pakistan affiliate, Rafhan Maize assessed benefits from promoting the use of AflaPak, an aflatoxin biocontrol product, in its upstream corn supply chain to reduce on-farm waste in corn. Additional benefits were increased sellable yields for growers, lower risk of supply disruption and improved operational efficiency for the company. The results showed the potential for a 9.3x return on investment to develop AflaPak and a 10-year NPV ~$15.5 million.

“Our ROSI food and agriculture sustainability monetization framework provides an important strategic decision-making tool that helps food and agriculture companies understand and unlock the benefits of more sustainable practices, such as operational efficiency, customer demand and loyalty and risk mitigation,” said Tensie Whelan, Founding Director, NYU Stern Center for Sustainable Business. “We are grateful to our partners at HSBC for recognizing the untapped opportunities created by investing in sustainability strategies and helping us share these valuable insights.”