This year is a milestone year for Olam. From first sourcing cashews in Nigeria in 1989 we have now reached our 25th anniversary growing, sourcing, trading, processing and distributing 44 agricultural products across the world. The meaning of our name, ‘Transcending Boundaries’, has never felt more apt.
As a trader in emerging markets, our sustainability ethos began as one of compliance, as we invested in necessary infrastructure such as roads, warehouses and logistics assets simply to get the cashews, cocoa and coffee from remote locations to the ports.
Then, as we worked more directly with the farmers, it evolved into an ethos of contribution, providing agricultural training, production inputs and finance to farmers and embarking on social investments in health, education and community infrastructure.
Finally, as we formalised our sustainability strategy, post IPO in 2005, it became an ethos of mutuality – always ensuring that an initiative benefited both the community and the Company at the same time. This ethos eventually gave rise to the Olam Livelihood Charter in 2010, which this year alone provided US$186 million in short, medium and long-term finance to 351,000 farmers enabling them to invest in their future.
In this year’s report we have sought to demonstrate our understanding of how the many different impact areas in a landscape interconnect, heightening both risk and opportunity. If you had told me in 1989 that today we would be employing over 1,060 dedicated sustainability staff to manage these impacts I would have looked at you in considerable surprise!
Equally, I would have doubted the calculation that in 2014 Olam would be paying US$18 million annually on bees to pollinate our almond orchards, or that in this financial year our debt to the natural world would be approximately S$200 million, if you were to take a realistic cost for water and carbon emissions. Over the past three years, our ethos, indeed our corporate purpose to Grow Responsibly is challenged by how to value natural capital appropriately (the benefits that flow from nature to us). It is clear to me that in the context of the impact of climate change, food price inflation, water stress, and energy shortages coupled with the rapid depletion of natural capital, trade barriers, a booming population and increasing inequalities, growing responsibly in one’s own silo can no longer be enough. Collaboration between all stakeholders and a landscape approach to these interconnected issues will be key to building sustainable and enduring futures for all of us. We want to play a key part in securing this future.
Olam’s role in food security is multi-faceted. At its most obvious we are today the world’s largest corporate farmer with farming and plantation investments in over 20 countries including for example, a large-scale rice farm and outgrower investment in Nigeria, palm plantations in Côte d’Ivoire and Gabon, dairy farming operations in Uruguay and Russia, grain farming operations in Argentina and Russia, and cocoa, coffee and almond plantations in multiple geographies. Less obvious is the role of crops such as sesame, hazelnuts, capsicum, onions, garlic and tomatoes, which are some of the other crops that we supply. If you define food security as food that is available, accessible, affordable and adequate, it’s about addressing a whole range of priorities. This includes improving smallholders’ ability to grow higher yields of both cash and food crops, reducing soil degradation and improving policy frameworks.
Indeed, Olam has identified 10 priorities to meet the food security challenge, listed on page 19, and we are contributing to each. We are also in a unique position in that through our own farms and plantations, coupled with our smallholder outreach, our teams across the world are gaining knowledge and insights about what it takes to get the best yield from highly specific (and changing) conditions. Obviously, data needs verification over time, but by better assimilating and processing this data, we can both help smallholders and governments catalyse food production, as well as contribute to wider industry and sector initiatives.
More challenging is applying our principles beyond our own supply chains. We estimate that nearly 8.3 million hectares are under the management of third party suppliers selling crops to our sourcing and trading operations. As a global agri-business, we recognise our responsibility in influencing those producers and the launch and roll-out of the Olam Supplier Code this year is an important milestone in this regard.
Olam is still learning. On most days this 25 year old Company is like a 25 year old person – mature enough to forge its way
in the world but still young enough to retain its entrepreneurial spirit and aspiration. But I am clear that if we are to live up to the other meaning of ‘Olam’ – ‘everlasting’ or ‘enduring’ – then our commitment to having sustainable supply chains isn’t just words for this CR&S report. If we are still to be here in another 100 years and more, it is the very foundation of our business and our future.