“There will always be those who will say not enough is being done or the efforts are not successful” when it comes to tackling environment and climate-related issues in the agri-food industry.
But, “those voices were loud a few years ago and they were right that we were not doing enough – and we have to be honest, therefore, in appraising our efforts”.
Speaking at the launch of ifac‘s annual Food and AgriBusiness Report for 2021 today (September 8), Minister for Finance Paschal Donohoe said that “if there’s any part of our economy that is capable” of handling the challenges yet to come, he believes it is agri-food.
“If I look at the change this part of our economy has gone through in recent years, it’s tremendously agile; it’s tremendously innovative,” the minister said.
“While it has a very high number of businesses that are family-owned, a very high SME share of the overall pot of enterprises – that’s never stopped innovation and never stopped change.
“But that innovation and change is going to need to continue now for other reasons.”
ESG
Environmental, social and governance (ESG), “once the preserve of ‘big business’, has arrived on the consumer agenda” and is one of the main themes of ifac’s report.
Environmental considerations for businesses include climate change; renewable energy; energy efficiency; and water management.
Among social considerations are health and safety; inclusion and diversity; employee benefits; employee turnover; and human rights.
Governance relates to ethical standards; cybersecurity; data protection and privacy; anti-bribery and money laundering; and financial transparency.
“Whatever your product or service, your consumer will want to know about your ESG credentials,” the report states.
Climate change challenges
Reassuringly, with agri-food in particular facing “significant challenges related to climate change”, ifac’s sentiment survey of Irish food and agri-business SMEs found that 37% are putting ESG factors high on their agendas.
In addition, 87% are taking positive climate change actions and all food and agri-business SMEs are “continuing to invest in climate change initiatives”, according to ifac.
Minister Donohoe said that fulfilling ESG criteria “is what consumers will be demanding; it is what investors will be requiring” and with the costs involved, “government will always look to play its part”.
When it comes to ensuring a viable agri-food sector in the future while also meeting climate targets, “they’re increasingly going to become two sides of the same coin” he added.
Covid-19 and Brexit
When asked at the launch about concerns over supply-chain shortages as a result of a combination of factors such as Covid-19 and Brexit, the minister said that this is an “economy-wide challenge”.
“This [agri-food sector] is one of these cases in an economy where actually, supply is going to influence demand. It’s normally the other way around; but actually what is going to happen here is, in effect, supply is going to be constrained, it is going to ration demand because the opportunity for some products won’t be there in the way it was in the past,” the minister said.
“Out of all the different challenges that we would face, I do suspect that food within Ireland will be a sector that will be able to respond back to this challenge far better and far more flexibly – I’m optimistic this might be the least of the supply challenges we face here in Ireland.”
With the impacts of Brexit a little clearer than 12 months ago, nearly two-thirds of business owners said their business has been partly affected.
38% of Irish food and agri-businesses who are currently trading internationally said they plan to increase sales to Northern Ireland and 43% intend to increase sales to Great Britain.
Meanwhile, 71% of respondents reported an increase in costs this year, from transport and energy to raw materials and packaging; an issue – in some cases – that could contribute to food price inflation in the coming months, ifac said.