Sustainability Investments Drive Revenue Growth and Cost Savings in the Food and Agriculture Sector

A collaborative study conducted by Deloitte and NYU Stern Center for Sustainable Business (CSB) has revealed significant financial benefits from sustainability investments in the food and agriculture sector. The study engaged 350 senior executives across the United States, the Netherlands, the United Kingdom, and Germany, offering a broad analysis of how sustainability strategies are being valued across different segments of the food value chain and varied geographies.

The report utilizes the Return on Sustainability Investment (ROSI™) methodology developed by NYU Stern CSB. This approach bridges the gap between sustainability efforts and financial outcomes, providing a robust framework for evaluating the financial performance of sustainability strategies.

Key findings from the survey indicate that nearly all companies that have invested in sustainability have recognized financial returns. These benefits are consistent across the five main segments of the food and agriculture value chain: processors, manufacturers, food services, restaurants, and retailers. Furthermore, the study highlights that companies co-investing in sustainability efforts report even stronger financial performance.

Despite the financial advantages already being realized, the research underscores the urgency and the critical need for the agrifood sector to address its environmental footprint. The sector is a major contributor to global greenhouse gas emissions and is a significant user of freshwater. The current agricultural practices also pose risks to food security due to their impact on land degradation, soil fertility, and biodiversity.

The survey results support the ongoing hypotheses about the economic incentives of sustainable practices but also introduce new insights into strategic actions that companies can adopt to enhance their financial gains from these investments. About 60% of respondents expressed confidence in continued positive returns from future sustainability investments, while a significant portion acknowledged the financial risks associated with inaction.

The report also emphasizes the importance of collaborative efforts in maximizing the impact of sustainability investments. Building enabling environments and enhancing cooperation within the industry are crucial for driving significant change and addressing the complex challenges posed by climate change and sustainability demands.

This detailed study serves as a vital resource for companies within the food and agriculture sector, providing evidence and methodologies to support increased investment in sustainability, which not only addresses critical environmental and social issues but also enhances financial performance.