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In 2017, Walmart released a toolkit to help suppliers lower emissions by 1 billion metric tons—or one gigaton—by 2030. The initiative, called Project Gigaton, relies on participating Walmart suppliers to cut down on their own greenhouse gas emissions throughout the supply chain, reporting back on their progress. The initiatives suggested adopting precision technology to manage inputs like fertilizer or feed for animals.
Walmart is among many large companies that are becoming increasingly hands-on about tracking agricultural practices up and down the supply chain. Unilever introduced its Sustainable Agriculture Code in 2010, which applies standards around nutrient and soil management to all agricultural suppliers, farmers, and contractors. PepsiCo, Kellogg, Procter & Gamble, and Land O’Lakes are some of the dozens of other consumer companies that have made similar commitments.
But for these companies, keeping reliable tabs on their supply chains meets more than environmental targets, it is a best economic practice.
One of the biggest challenges to the global agriculture system is feeding the growing population using the world’s fixed amount of land. The Business and Sustainable Development Commission, a group of business and civil leaders dedicated to mapping out the global business opportunities of sustainability goals, suggests five opportunities for improved sustainability for food and agriculture businesses—the first of which is inputs, a $520 billion piece of the value chain. (The other four are production, food processing, logistics, and retail/disposal.)
Methods and types of fertilizer application have effects on individual farms, agricultural regions, and the environment at large. Nutrient runoff from fertilizer damages waterways—and the communities and farms near them—through eutrophication. And scientists studying fertilizer in soil have also found that they can be a direct source of greenhouse gases, especially when nitrogen fertilizers are applied in high quantities.
Reducing NPK fertilizer can save cost on farms, as well as help the bottom line of companies up the chain if lower costs contribute to higher margins.
Practices like intercropping and cover cropping can improve soil health without the use of amendments, while precision techniques can easily evaluate soil health, crop needs, and local conditions. Maintaining real-time soil health data is one of the most effective ways to reduce fertilizer input, allowing growers to easily adjust inputs on the farm. Not only does that save money by applying just the right amount of inputs that crops need, it saves time.
Maintaining real-time soil health data is one of the most effective ways to reduce fertilizer input.
In order for large companies to get a complete view of their supply chains, they require each entity to report a set of data.
For Walmart, companies report the number of acres engaged in a fertilizer-optimizing program, where the farmland is, what type of crop is being planted, and the type of programs and practices used. Exact programs are up to the farmer and are classified by data showing that nutrient use efficiency has improved by less than 10 percent (low), 10 to 20 percent (medium), or more than 20 percent (high).
Walmart’s recommendations for doing this include reduced tillage, using nitrogen-loss monitoring to inform mid or late-season fertilizer application, and using fertilizer recommendations optimized for weather data. Farmers then report their reductions through Walmart’s Gigaton Submission Form or through a climate change questionnaire.
But for companies up and down the supply chain, the lower the reporting burden is, the more time farmers can spend on developing precision techniques and best practices to reduce inputs.
“We have to try to minimize the amount of time that farmers spend providing data,” Becky Kenow, Sustainability Director at Land O’Lakes, told Field to Market, an alliance that seeks to measure and advance sustainability across the food system. “Agreeing on what those common metrics are and reaching alignment across the agri-food value chain is going to be important if we want to get adoption by the farmers.”
To that end, low-touch technology that aids in transparency, like a combination of blockchain and IoT, could become invaluable for meeting supply chain sustainability goals.
Low-touch technology that aids in transparency, like a combination of blockchain and IoT, could become invaluable for meeting supply chain sustainability goals.
Supply chains are responsible for up to four times the amount of greenhouse gas emissions as a company’s direct operations, according to CDP, a global disclosure system. The best way for companies to have a real impact is to implement sustainability practices down the chain and then track how suppliers are doing.
The data shows that the method is having an impact. According to Walmart’s calculations, in year one of Project Gigaton, participating companies reduced the amount of greenhouse gas emitted by their supply chain by 20 million metric tons. For agriculture, a midrange goal for Walmart is to optimize fertilizer use on 34 million acres of land by 2025, according to their 2018 proxy statement.
Since it’s not Walmart’s own land being farmed, they need to know from farmers exactly which practices they’ve implemented. Walmart plugs companies’ reporting into an equation for fertilizer use: Acres x Emissions Factor = Emissions Reduced. Then, as the years in the next decade tick down, it can track the overall sum of emissions reductions.
While Project Gigaton focuses on reducing greenhouse gas emissions across the supply chain, noting "there is a potential to reduce 300 million metric tons of GHG emissions by 2030," their proxy statement states that these efforts will simultaneously reduce waste and improve yields at the farm level—even more of an incentive for farmers operating on tight margins.
Efforts to reduce fertilizer use will simultaneously reduce waste and improve yields at the farm level.
Many large companies are at just the beginning of their sustainability journeys, with near-term goals still far off (like 2030). There was a historic high of 32.5 gigatons of carbon emissions worldwide last year. The United States, however, did reduce emissions in 2017.
That milestone may come as much through individual fertilizer reduction as through the growing trend of companies adopting sustainability practices. In fact, according to Walmart’s own research, one of the most powerful parts of Project Gigaton is that it serves as inspiration. In a survey of 153 consumer companies, Walmart was cited as the top retailer that inspired them to invest in their own sustainability programs.
Gigaton goals aside, more large companies investing in reducing fertilizer use in agriculture can help pave the way for both smaller companies and individual farms to precisely manage their inputs in easier, more cost-effective ways.