ATLANTA, GEORGIA, US — Too often companies limit their view of environmental, social and corporate governance (ESG) to carbon footprint and diversity, equity and inclusion (DEI). It can be so much more than that, said speakers during the “Feed Your ESG: How Feed Will Help Hit Sustainability Targets” conference sponsored by the American Feed Industry Association (AFIA).

“ESG is your journey,” said Mike Gauss, president of Kent Nutrition. “You’ve got to make it your journey and not listen to what everyone else tells you it should be. It’s far more than carbon and DEI, and quite honestly, that may be lower on your priority list.”

Gauss spoke during the conference, which was held at the International Production and Processing Expo (IPPE) in late January in Atlanta, Georgia, US. About 120 people attended the event, which focused on the relationship between sustainability and animal feed production.

“Our goal with this educational program is to bring understanding to the complexities of sustainability and ESG metrics within the animal feed industry,” said Paul Davis, PhD, director of quality, animal food safety and education at the AFIA. “The heart of the animal feed industry lies in its commitment to sustainability, extending beyond environmental factors. This commitment reflects the industry’s dedication to not only nourishing animals but also enriching the lives of employees and the communities they support, which has an important place when it comes to overall sustainability.”  

Defining ESG

When it comes to ESG, many people are going to try to tell a company what it should care about, Gauss said, but you have to make it your own. For Kent, that meant building its ESG pillars on its core values of honesty, quality, safety and timeliness.

“What is your goal as you think through ESG? What do you want to accomplish and how are you measuring and monitoring to see if you are actually getting it done?” Gauss asked. “It is important for us to monitor, measure and improve, but we have to be careful as this space does continue to evolve. It’s got a lot of different perspectives. It’s complex and it’s quite ripe for unintended consequences.”

He noted that New Jersey enacted a ban on single-use plastic bags. As a result, the state’s use of plastics tripled as people searched for alternatives.

“That was something somebody put into place because they thought it would be a great benefit and help the environment, but it had some strong unintended consequences,” he said.

Gauss said ESG risks and opportunities cannot be put in a box and be a separate topic or discussion because they really go hand in hand with business opportunities and risks.

“It has to be integrated into how you function as an overall business because there’s tons of stakeholders and tons of implications,” he said.

In its ESG journey, Kent talked with all its stakeholders, including employees, customers, communities, industry associations and suppliers, about what areas were most important to them. As a corporation, emissions and energy management were the most important followed by employee health, safety and well-being.

“That didn’t just come from employees, it came from all our stakeholders,” Gauss said. “They care about how we treat our people and how we take care of our employees.”

"It (ESG) has to be integrated into how you function as an overall business because there’s tons of stakeholders and tons of implications."

From there, Kent determined that ESG will be built on three pillars of social responsibility, economic stability and environmental footprint.

“As you start this journey, look at what you’re already doing,” Gauss said. “My guess is you are already doing a lot of things that have tremendous impact; you’re just not taking credit for it. You don’t have to be shy about your ESG program also helping your bottom line.”

In the environmental area, Kent has reduced its air emissions, the amount of product going to the landfill and effluent production. It also has invested in solar panels, reduced the amount of products it trucks, and upcycles ingredients, such as feeding distillers grains it produces in alcohol production to its animals.

“No customer or company told us to do this,” he said, noting that it just made business sense.

Kent also has products such as its World’s Best Cat Litter made from No. 2 dent corn and an ammonia reducing litter topper, that have great ESG stories.

“Think if you have products that have great ESG stories,” Gauss said. “Are you taking credit for those? Are you expanding your view of what ESG is to be able to make that work for you?”

Economic stability is important because employees and customers are counting on Kent for work, income and support and products, Gauss said.

“It comes down for us to quality of earnings and diversification, and that implies that we care about ESG,” he said. “We factor those things in, but we don’t do it at the expense of everything else. We do it as an inclusive aspect because ESG risk and opportunities are really business risk and opportunities.”

Under the social responsibility pillar, Kent is focusing on employee health and well-being as well as helping the communities in which it operates. It recognizes employees with service awards, helps pay for college and offers learning and development within the organization. It has donated toward the Iowa State University feed mill project and a new health care clinic in Iowa.

“We want to take care and grow our people and care about the local community and people living in those communities,” Gauss said. “Don’t listen to what the crowd says your ESG stance should be.

“Take a look at your core values and decide where you want to be and what you’re doing. I encourage you to think beyond carbon and DEI. There are more things that your stakeholders may care far more about that are not encompassed in those.”

Sustainability journey 

Like ESG, sustainability is its own journey, said Lara Moody, executive director of the Institute for Feed Education and Research (IFEEDER), which is the research and education foundation for the US feed industry. She addressed the role the feed industry can play in the sustainability of the food supply chain.

“It’s not for us to define what sustainability means to your organization,” Moody said. “What sustainability is about is continuous improvements and the measurement of that improvement on issues that you and your stakeholders deem important. There are many issues. It is not only climate, energy and water.”

But no matter how it’s defined, sustainability is not going away, Moody said. In a survey of the feed industry last year, 90% of respondents said they expect to continue to advance sustainability work in the future.

“We’re early for the feed industry in our journeys,” she said. “We expect this to continue to be driven by our customers, by investment capital expectations and by our regulators. We don’t see it going away. It’s something we all need to be able to speak to for our organizations.”

The food supply chain, of which the feed industry is a part, is being driven toward sustainability goals by customer expectations, corporations and animal agriculture groups, Moody said. Another study last year found that products with sustainability labels had outsized growth compared to ones that did not. That’s driving companies such as Nestle and Starbucks to focus on sustainability.

Several animal agriculture groups have formed specific groups and consortiums to study sustainability and set goals and targets. Corporations also have set a variety of climate targets and goals.

“Feed is a part of that because when you think about the footprint piece for animal agriculture, whether we’re talking about greenhouse gas emissions, water or energy, 40% to 75% of the Scope 3 emissions is tied to feed,” Moody said.

The food supply chain, of which the feed industry is a part, is being driven toward sustainability goals by customer expectations, corporations and animal agriculture groups.

In response, corporations go talk to farmers, because they associate feed with corn and soybeans, not necessarily the feed producers, she said. There is a huge opportunity for reducing the environmental footprint in crop production with such things as carbon sequestration, no till and fertilizer reduction, but implementation is very slow.

“There’s a huge potential but it’s going to take a long time to get there,” Moody said. “How can we make feed ingredients part of their solution? How do we get those downstream stakeholders to look at the feed industry itself, and quit jumping over the top of you to the farmers?

“Think about how the products that you make can help our downstream customers in their goals and targets that they are setting.”

IFEEDER, in conjunction with the stakeholders in the animal food value chain upstream and downstream, identified four themes in which the feed industry can reduce its environmental footprint. They include feedstuff production, ration innovation, circularity and responsible sourcing.

Ration innovation could be everything from probiotics to modifying the process in biofuels plants to increase the protein content of soybean meal. The industry is already circular in that nearly 40% of the ingredients used are coproducts and byproducts but a better job needs to be done on measuring that, Moody said.

For its part, IFEEDER is working in two areas: feedstuff production and ration innovation.

“Ration innovation is really important, and I think it’s where we have the opportunity for the industry,” she said.  

IFEEDER produced a Sustainability Road Map and a Sustainability Toolkit, both of which are available at ifeeder.org. Some new resources are on the way, Moody said.

IFEEDER is currently interviewing the animal food industry in the United States and Canada to assess the current state of data and information systems. The objective is to provide recommendations that will improve access, quantity, and interoperability of high-quality data needed by the US animal food industry. That information should be available in the next few months, she said.

The next project comes under ration innovation and will explore public and private research to assess common animal performance metrics relative to sustainability focused calculations. The feed industry already does a great job of researching new ingredients to show potential customers the return on investment.

Evaluating the ROI in general involves showing improvement in things such as mortality, immunity, average daily gain or feed conversion. If a product brings a broiler to optimum weight a day faster, that’s less grain, water and energy used to produce that animal.

“These are things that we can quantify as an environmental benefit,” Moody said. “We’re great at ROI and great at some of those performance benefits, but we don’t do a great job of converting those into environmental benefits.

“I think this is where we have an opportunity. We don’t have to take advantage of it, but if we have customers that are coming to us and asking how they can reduce their own footprints, this is something we can do to help them with that.”

IFEEDER is in the first phase of the project, which involves methodology considerations, specifically identifying the range of metrics that relate to potential environmental impacts of feed ingredients. Eventually, IFEEDER would like to have a standard methodology that downstream customers could use to calculate the footprint.

A third project involves lifecycle assessments, including conducting a gap analysis of private LCAs specific to the animal feed industry. The outcome will include a recommendation on best practices to close gaps between current industry LCAs and the Global Feed LCA Institute (GLFI).

In partnership with Kent Nutrition Group, Hill’s and Iowa State University, IFEEDER is working to expand the awareness of key sustainability issues that are important to the industry. IFEEDER is adding resources to the Sustainability Toolkit on 16 topics under people, planet and governance. Each topic will have a brief explanation, the value of assessing and documenting continuous improvement of the concept, and several real-world examples from industry members.

Moody expects that will be ready by early March.