Bayer - January 2022 by BizClik Media

Increasing crop production without starving the planet DIGITAL REPORT 2022

INCREASING

CROP

PRODUCTION WITHOUT

STARVING THE PLANET

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The paradox of agriculture is how to produce more with less environmental and climate impact: we talk with Bayer's Head of Sustainability, Klaus Kunz

ith a turnover of more than €40bn and a million employees, Bayer is a giant by any standards. Its Crop Sciences Division has grown alongside the traditional pharmaceutical business since it was launched in 2002, particularly since its acquisition of its American rival Monsanto. At that time, Chairman Werner Baumann asserted: “Our sustainability targets are as important to us as our financial targets,” a bold statement but a commitment all companies are having to take on in the new reality that's developed around climate change, biodiversity and population growth awareness. Agribusiness is especially under pressure to change and adapt to the sometimes conflicting pressures from the environmental lobby, the urgent need to feed ever growing populations and (frequently misinformed) public perception fuelled by social media or the press. That's part of the reason why Klaus Kunz, Head of Sustainability and Business Stewardship at Bayer Crop Science, has one of the most demanding jobs in this sector. He's been with Bayer for ten years, in his present job for the last three and a half leading sustainability initiatives and before that leading on compliance and regulatory issues. Thus he played a big part in formulating Bayer's three part commitment made in 2019, a rethink of Bayer's strategy following the Monsanto acquisition: 4

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Klaus Kunz, Head of Sustainability

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“ I THINK THE MOST SPECTACULAR STEPS FORWARD WERE OUR FIRST PILOTS IN THE AREA OF CLIMATE SMART AGRICULTURE” KLAUS KUNZ

HEAD OF SUSTAINABILITY, BAYER

• To reduce the environmental impact of crop protection by 30% by 2030 by developing new technologies, e.g. helping farmers to scale down crop protection product uses and enabling a more precise application. • To reduce field greenhouse gas emissions from the most emitting crops systems in the regions Bayer serves by 30%. • And to empower 100m smallholder farmers by providing greater access to sustainable agricultural solutions. Reaching these goals will not solve the problem, he admits, and it's not yet clear exactly how they'll be met, but he says that setting high standards is an essential step on the road to transformative change. “The strategy shift was a clear statement, and a clear commitment to place sustainability at the core of our business in the future. I have seen massive changes in recent years and I'm 6

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really happy to have had the opportunity to contribute to those changes.” At Bayer, sustainability now has taken centre stage, delinked perhaps from corporate affairs and PR motivations. Now it is linked to impact, he says: “If you want sustainability to create an impact, you have to embed it in the business. There's no other way to do it. We and our competitors used to say our driver was to feed the world. Nothing wrong with helping farmers to improve their yield, but we have a lot of customers in the Americas and Europe among large-scale farmers, but if you say you want to make a contribution to feed the world, you need to focus also on smaller growers in low- and middle-income countries.” Part of the strategic shift was to acknowledge that food security is a huge concern in much of the world, and that to make an impact here and be more inclusive of smallholders would involve huge investment: hence the commitment to improve the lot of 100m of these small farmers. Bayer already has a strong presence in that market but it is far from the aspired target.

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Bayer: increasing crop production without starving the planet

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KLAUS KUNZ TITLE: HEAD OF SUSTAINABILITY INDUSTRY: CHEMICALS

EXECUTIVE BIO

LOCATION: GERMANY Klaus Kunz is Head of Sustainability at Bayer Crop Science. He is a manager with 19 years’ experience in global strategic matters and projects. He is an effective team leader with a work history in research, development and project management as well as regulatory & public/governmental affairs. Klaus has a thorough understanding of the global regulatory and political environment, based on multiple interactions with local authorities worldwide. He is passionate about leading people, and tackling strategic cross-cultural and cross-functional challenges.

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However, particularly in Europe, there's growing concern about the impact of farming on biodiversity loss, greenhouse gas emissions, GMOs and the like. “We know agriculture plays a significant part in climate change, so we must talk about how to produce more and reduce the environmental impact of crop protection at the same time. Up till 2018 our industry was not very vocal about this, which is why we committed to reducing greenhouse gas emissions on our customers’ fields and the impact of our crop protection products by 30% until 2030.” Delivering the promise So how to produce more and preserve better? Klaus Kunz is emphatic that a key tool will be better technology. “We believe there are disruptive technologies on the rise – it's about digital agriculture, precision application of crop protection to reduce volumes, and new breeding technologies which will open new opportunities to grow stronger plants.” With the help of his dedicated sustainability team and a growing sustainability network inside the company he has lined up a programme of work, first making sure that all the business units across the world know, understand and engage with the strategy.

“ IF YOU WANT SUSTAINABILITY TO CREATE AN IMPACT, YOU HAVE TO EMBED IT IN THE BUSINESS” KLAUS KUNZ

HEAD OF SUSTAINABILITY, BAYER

So far the most spectacular step was to engage farmers with the concept of 'climate smart agriculture', the economic part of the equation, and this he finds truly exciting and innovative. “We want to incentivise growers for carbon sequestration, for a way of doing agriculture which helps to reduce emissions or even to put carbon back into the soil. We saw an opportunity to create business value from doing things more sustainably.” Many companies have set carbon neutral targets. Bayer's is 2030 – but many companies cannot become fully www.bayer.com

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DID YOU KNOW...

THE BAYER CARBON INITIATIVE

Rewarding responsible farmers with a whole new revenue stream In July 2020, Bayer announced its Carbon Initiative in the USA and Brazil. The long-term scheme offers a payment of $3 per acre for reduced tillage (strip-till or no-till), $6 per acre for cover crop adoption, and $9 per acre for adopting both practices, per year. On the principle that earlier adopters should also benefit, any participant who implemented any eligible practice on an enrolled field on or after January 1, 2012, is eligible for historical payments after verification by Bayer. “Farmers are passionate environmentalists and stewards of the land they farm,” said Brett Begemann, COO of Bayer’s Crop Science division. Their lives and livelihoods depend on the weather, and they are some of the first to be affected by drought, flooding and extreme conditions. If anyone has a vested interest in battling climate change it’s farmers, and we are committed to developing new business models like this unique Carbon Initiative to help them in that fight.”

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carbon neutral and stay in business too, so their route is to offset – to buy carbon credits from businesses that are able to do more. Farmers are a case in point: they grow plants that absorb carbon dioxide and put it back into the soil. This gives them a potential second revenue stream or financial asset in addition to the market value of their crop. This asset needs to be science-based, he says, and verifiable by an independent ISO accredited third-party verifier, and the credits gained traded on the market like any other asset.

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Alongside offsetting the 'insetting pathway' is just as important for Bayer. Bayer is not alone in its quest to become carbonneutral by 2030, not only through its own operations but also its supply chain. “Take the example of the big food distributors like Cargill and Metro: their supply chain is mainly the growers and it's in their interests, too, to incentivise the farmers. So both through offsetting and insetting farmers will find an opportunity in the future if they change their approach, and face a disadvantage if they don't. We are here to help them.”

Making sustainable agriculture pay Bayer is taking great strides expanding its sustainable initiatives. “I think the most spectacular steps forward were our first pilots in the area of climate-smart agriculture. We want to incentivise growers for carbon sequestration and for a way of doing agriculture which helps to reduce emissions or even put carbon back into the soil. We already have our Carbon Initiative running in Brazil and the USA, and this year we rolled it out to seven countries in Europe.” The principal aim is to reward growers for adopting climate-smart farming practices like using cover crops, tillage reduction, crop rotations and precision nitrogen application. These activities sequester carbon in the soil while improving soil health, resilience and productivity as well as limit emissions. It's not always this easy to see the right ways forward, he continues, pointing to the example of rice culture in Asia. Traditionally rice is grown in flooded paddy fields: as well as irrigating the rice, the water also acts as a herbicide, so the rice grows out of the water without weeds to compete with – a double benefit. “But there's a problem. Many areas don't have enough water already and that's a problem that we know will get worse. And a hidden problem is that tremendous amounts of methane are formed underwater, in the anaerobic conditions at the roots of the rice plant. Paddy rice is a huge emitter of greenhouse gas and you could make a big saving on emissions and water use by going over to dry-seeded rice, hybrid rice, or even other crops. There's not a single way to do sustainable agriculture.” Embracing the concerns that people have over biodiversity, emissions, genetically modified organisms and the like and businesses have to find a new language to www.bayer.com

KEY PARTNERSHIPS

“ My dream has always been to open a shop with agri inputs, through which I could help farmers on a large scale with better guidance and training” RANJU SINGH

SMALLHOLDER FARMER JHARKAND, INDIA

A BETTER LIFE FOR FARMERS Better Life Farming, a long-term partnership of Bayer, IFC (International Finance Corporation), and Netafim, aims at enabling smallholders to unlock their farming potential. With our joint forces we want to assist smallholder farmers to grow their farms into commercially viable and sustainable farming businesses. This will encourage financial security, increase knowhow and create a meaningful impact in their lives. With nearly 500 Better Life Farming centres set up in India by the end of 2020, many more smallholder farmers will be empowered to improve food security in India – not least thanks to new hybrid tomato varieties displaying much longer post-harvest freshness. This will help tackle the serious problem of food loss during transportation.

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Ranju Singh, Smallholder Farmer in Jharkand, India Ranju Singh grows vegetables and cereals in the Chatra district of India’s Jharkhand State. After working as a small-scale seasonal seed seller, she decided to join the Better Life Farming (BLF) initiative and open a BLF Center as an agrientrepreneur. Social service is an integral part of Ranju Singh’s life. Her BLF engagement is just one facet of this commitment. Besides helping smallholder farmers, she is passionately committed to uplifting and empowering women and juvenile girls. The smallholder farmers in Ranju Singh’s locality lovingly refer to this resolute lady as ‘Didi’, which means ‘older sister’ in Hindi. They have every reason to do so. Besides running her own farm, Ranju Singh provides her fellow farmers with access to an ecosystem of farming solutions via the Better Life Farming initiative – solutions tailored to the needs of smallholders in India.

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From seed seller to agri-entrepreneur Prior to joining Better Life Farming in June 2020, Ranju Singh was a small-scale seasonal seed seller travelling from village to village. She could only supply seeds to the smallholders who happened to be around when Ranju visited their village. But with multiple villages on her visiting list each week, the chances were high that smallholders would miss the opportunity to buy seeds. What she values most about Better Life Farming is the availability of inputs, guidance and advice on the best possible utilisation of time, effort and money. That, she knows, is important because a lack of modern-day cultivation knowledge and supportive guidance in the past had limited the smallholders’ opportunities to develop their farming potential. But now more and more of them are applying advanced technologies such as drip irrigation, mulching, staking, shade cultivation, etc. This is all the more important given the challenges smallholder farmers face in India. In particular, many of them are on the verge of opting out of farming because they lack appropriate marketing channels and access to professional off-takers. As a result, they suffer from low produce prices and insufficient returns on their farming investments.

member of an NGO, Mahila Mandal, which serves around 3,000 farmers in the region and also works to uplift and empower smallholder farmers and women in the Chatra district. In the past, Ranju Singh was involved in a number of social welfare organisations and is currently engaged in providing social and legal justice to juvenile girls in her area. What’s more, the project is helping poor, disadvantaged children to escape from the drudgeries of child labour and gender discrimination and lead better lives in the future. By sharing her story with these children, she hopes to encourage them to develop a more clearly defined purpose for their lives – be it in agriculture or elsewhere. Ranju Singh’s concern to empower women and support female agri-entrepreneurs ties in well with one of the Better Life Farming Alliance’s goals: Women Empowerment and improving female smallholders’ access to information, services and resources are key to addressing the enormous social, economic and environmental challenges faced in rural India, for example. Newly established womendedicated BLF centres in India are one practical example of how the Alliance is promoting gender-smart initiatives across smallholder farming countries.

Working to empower women Besides her commitment to smallholders in general, Ranju Singh is particularly concerned about helping female agrientrepreneurs in successfully growing and marketing their crops. Ranju is a highly active

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“TO DISCUSS IMPORTANT MATTERS DEEPLY I THINK YOU NEED TO BE IN THE SAME ROOM, ENGAGED IN A CREATIVE PROCESS WITH A FLIP-CHART AND SIX OR SEVEN OTHERS. THAT'S THE WAY TO CREATE REAL SOLUTIONS TO REAL PROBLEMS” KLAUS KUNZ

HEAD OF SUSTAINABILITY, BAYER

explain the problems. Continuing the paddy rice example, to save communities more than 50% of the water now required and still grow a crop will require new varieties with greater stress tolerance and this opens new opportunities for innovation. “I used to make the mistake of promoting impact reduction, which some in the business equated with revenue reduction: now I think we all see that huge new opportunities are opening for us – for example the carbon business that we now have didn't exist before. If we want to drive culture change in the business, these are the key messages we need to understand.” Another example is reducing pesticide impact. “Will this mean taking products off the market? Well, Bayer has been screening products for decades, not just selecting those with the greatest efficiency against pests and diseases but for safety, the protection of beneficial organisms, and more selectivity: this is more embedded than ever, and any product coming into our pipeline today has to meet these standards. The entire business is beginning to really engage here, and I find that extremely exciting as we all start to see added value and new

revenue streams coming out of sustainable practices.” As a commitment, five years ago, Bayer announced that it would make its vast database on its crop protection products, previously only shared with regulators, publicly available: a huge step he says in establishing public trust. On the matter of pesticide safety, the burden does not rest solely on manufacturers. What can be done about end users who over-use products, or in extreme cases dispose of empty containers unsafely, or wholesalers that supply irresponsible retailers? But Bayer is playing its part. He has a team working on business stewardship. It's one thing to have proper labelling and user guidelines, but many farmers may not be able to read. “It's so important that we train and train farmers, talk to governments in those societies to make sure there is proper use of crop protection. Professionalism is often lacking in the downstream supply chain. I have teams working on these problems: for me end-to-end sustainability is central to our work.”

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