Assessment of Smallholder Training Programs in Food Sector Climate Strategies

The future outcomes of climate change, the food sector, and supplier land management are codependent. The food sector is responsible for 37% of global greenhouse gas emissions—predominantly due to land use practices—while also facing decreased productivity as climate change worsens. As food companies and suppliers seek to increase yields, they run the risk of exacerbating this dynamic by intensifying and expanding production. Smallholder farmers (SHF) will play a key role in determining the trajectory of the sector’s land use, as they are particularly vulnerable to climate change and the need to boost food production for household income and consumption. Reducing emissions and mitigating climate risk in the food sector is therefore contingent upon strategic engagements that incentivize and support farmers—particularly SHFs—to transition to land use practices that boost productivity and reduce emissions across supply chains. Encouragingly, food companies are increasingly setting targets to reduce their emissions and establishing climate strategies to address supply risk. Many companies also have long-standing training programs to support SHFs, typically through philanthropic and Corporate Social Responsibility initiatives.

However, even where companies are both taking climate action and engaging with small farmers, it is unclear how or if these initiatives are integrated within corporate climate strategy. Alignment across these efforts could accelerate progress by leveraging ongoing programming, and maximize investments and results by identifying synergies across these interconnected objectives. Failing to integrate these initiatives could lead to ineffective investment of limited funding; duplication or counteraction of efforts; and ultimately failure to optimize outcomes across these vital interventions for the sector. In sustainable business strategy, “embedded” initiatives (in which sustainability concerns are integrated into a company’s core strategy) are recognized as more effective than “bolt on” strategies, which tout “green initiatives and social philanthropy,” but are separate from the company’s core strategy. Beyond business strategy, it will be important for companies already investing in initiatives with smallholders to understand how these programs are “embedded into” or “bolted onto” their broader climate action if they are to optimize their efforts to bolster supply, reduce emissions, and support livelihoods. Given the importance of small farmers in creating a sustainable and viable trajectory for global food production and climate action, this study assesses the degree to which companies’ smallholder training programs are embedded within their corporate aims to reduce emissions and mitigate supply risk. Any learnings or areas for improvement will not only inform Corporate Sustainability Officers looking to scale their impact, but will also provide an important road map for companies newly investing in these types of interventions within their supply chains.

To improve the level of comparability within this sample, I limited the study area to food companies with 1) emissions targets verified by the Science-based Targets Initiative; 2) climate strategies reported to the same environmental disclosure platform, the Carbon Disclosure Project (CDP); and 3) SHF training programs in Latin America with the same implementing NGO, TechnoServe. I begin by examining companies’ publicly facing sustainability communications, such as Corporate Impact Reports. I examine these publications using the four capitals of environmental economics (natural capital, produced capital, and human and social capitals) to assess companies’ expressed priorities and concerns when communicating to stakeholders about sustainability efforts within their supply chains. I then draw on the principles of materiality and sustainable business strategy to track how supply chain concerns flow throughout companies’ climate strategies, as reported through their CDP “Climate Change Surveys.” I examine how those supply chain concerns translate (or fail to translate) into concrete targets, and then compare these targets with the metrics for success defined in their training programs. I use this alignment as a metric to evaluate the embeddedness of those programs into broader corporate climate action, and posit initial considerations to better integrate smallholders into more effective corporate climate strategies.

Findings within this sample indicate that companies emphasizing broad social outcomes for their farmers—rather than explicit land use outcomes within their value chains—are motivated by “social philanthropy” rather than “embedded sustainability,” and, because of this, fail to leverage their investments to drive progress against corporate climate action. While the limited scope of this study does not allow for generalizable conclusions, it highlights initial trends and considerations that can be used by Corporate Sustainability Officers and implementers such as TechnoServe with the power to better align these climate initiatives and optimize their impact.

Companies with “embedded” training programs distinguished themselves by training their direct suppliers, aligning training outcomes with internal supply standards, including specific land use concerns within these standards and public sustainability communications, and addressing challenges farmers may face in complying with those standards (for example facilitating access to credit). All “embedded” programs acted within a value chain that accounts for at least 30% of the companies’ revenues.

Based on these findings, it will be important for Corporate Sustainability Officers managing “bolt on” farmer engagement programs to identify an achievable, initial set of sourcing standards that can bridge the gap between their farmer training activities and their supply-chain and climate interventions. Third-party certifications and implementing partners could facilitate this transition by providing verification standards and adapting ongoing training curricula to meet these standards, respectively. Because many of these programs are already promoting best practices similar to embedded programs’ sustainable sourcing criteria, a key challenge for corporate sustainability teams will be to measure uptake of those practices in relation to emissions outcomes, and to concentrate training within their companies’ sourcing channels. It will therefore be essential for these teams to understand and mitigate the barriers their sourcing counterparts may face in making direct investments with local suppliers. Conversely, companies with “embedded” training programs could leverage their land use outcomes to establish more rigorous emissions targets.

For implementers working with both types of companies, it will be vital to understand their role in making the above transitions feasible and desirable for food companies in order to optimize results for the climate, food production, and the producers who depend on both.