ESG in agribusiness - fashion or necessity? How agriculture is responding to environmental, social and regulatory challenges.

In 2022, the drought caused losses of up to 13 billion zlotys in Polish agriculture, and at the same time the European Union was finalizing the landmark CSRD (Corporate Sustainability Reporting Directive). The agribusiness sector then saw a major shift in the perception of sustainability. ESG - that is, environmental (Environmental), social (Social) and corporate governance (Governance) criteria - became a practical tool for assessing and managing companies' activities in terms of their impact on the environment. CSRD, on the other hand, makes non-financial reporting mandatory, standardizing how companies, including agri-food entities, document their sustainability activities.

In practice, this means that sustainability in agriculture has ceased to be an abstract concept from management textbooks and has become the language of everyday strategic decisions on farms and agricultural enterprises. Today, the question is no longer „whether to implement ESG?”, but „how to effectively survive and thrive within its framework?”. Sustainability in agriculture is no longer just a fashionable addition to strategy, but is becoming the foundation of the new market game, determining competitiveness, access to financing and the sector's resilience to future challenges.

The socio-economic development model that is emerging in response to the new ESG regulations requires companies and farms to be not only innovative, but also environmentally and socially responsible. Economy and industry, including the agri-food industry, play a key role in promoting sustainable development in agriculture by supporting the implementation of environmentally and socially friendly practices.

Implementing the principles of sustainable development is becoming an integral part of companies' and farms' strategies. The balance between economic, environmental and social development is crucial for the sustainable progress of the agricultural sector.

Setting clear principles and standards of operation allows for effective risk management and building trust with business partners and consumers. These principles are the foundation for implementing sustainable development in agriculture.

Investing in the future means not only protecting the environment, but also building the sector's resilience to climate and market changes. The social dimension of sustainability in agriculture emphasizes the importance of quality of life and sustainability in rural communities.

Sustainability in agriculture - an introduction

Sustainable development today is not just a fashionable slogan, but a real necessity that sets the course for the entire agricultural sector. In practice, it means such a model of socio-economic development that makes it possible to meet the needs of current generations without denying this opportunity to future generations. In agriculture, sustainability translates into the pursuit of the production of high-quality food and agricultural raw materials while caring for the environment, animal welfare and the living and working conditions of farmers, workers and local communities.

Agriculture, as one of the largest users of natural resources such as water, soil and energy, faces enormous challenges today. Climate change, soil degradation, limited water availability and growing social expectations make the implementation of sustainable development principles not only a responsibility, but even a condition for maintaining competitiveness and production security. Protecting natural resources is not only a concern for the environment, but also for the future of agriculture and ensuring a stable food supply for all.

Supporting sustainable agriculture requires the involvement of many parties - from public institutions to the agri-food industry to local communities. The key to success is the implementation of innovations and modern technologies that reduce greenhouse gas emissions, optimize energy and water consumption, and improve animal welfare. Only through cooperation and openness to change is it possible to achieve sustainable development goals, such as ensuring food availability, protecting the environment and promoting socioeconomic development in rural areas.

In order for sustainability in agriculture to become a reality, it is necessary to establish clear rules and standards that apply throughout the sector. These concern not only environmental protection, but also animal welfare, working conditions for farmers and workers, and production quality and safety. Implementation of these principles requires continuous education, training and exchange of experience, as well as close cooperation between all market participants.

In conclusion, sustainable agriculture is not only an answer to the challenges of today, but also an investment in the future - both for the environment and for people. It is sustainability that is the key to protecting natural resources, ensuring the sustainability of food production and building strong, resilient local communities. Supporting this transformation is a shared responsibility and an opportunity to achieve long-term benefits for society as a whole.

From degradation to regeneration

Rolnictwo znajduje się w paradoksalnej sytuacji – jest zarówno ofiarą, jak i sprawcą zmian klimatycznych. Z jednej strony przyczynia się do emisji gazów cieplarnianych, z drugiej – jest narażone na skutki tych zmian, takie jak ekstremalne zjawiska pogodowe czy degradacja gleby. Według raportu FAO z 2024 roku globalne emisje gazów cieplarnianych z systemów żywnościowych w 2022 roku wyniosły około 16,2 miliarda ton ekwiwalentu CO₂, co stanowi około 30% całkowitych emisji antropogenicznych. Z tej liczby 44% pochodzi z metanu, głównie w wyniku fermentacji żwaczowej u przeżuwaczy, a 22% to podtlenek azotu pochodzący głównie z nawozów azotowych. W Europie sytuacja wygląda nieco lepiej, ale rolnictwo wciąż odpowiada za około 10% emisji gazów cieplarnianych. W UE emisje te od 2005 roku wykazują trend spadkowy, a między 2022 a 2023 rokiem odnotowano kolejne, niewielkie spadki. Równocześnie sektor zmaga się z degradacją gleby, która traci próchnicę szybciej, niż jest odbudowywana, zanieczyszczeniem rzek azotanami oraz utratą bioróżnorodności w wyniku intensyfikacji produkcji rolniczej.

Fortunately, concrete solutions are emerging with real results. This shows that the implementation of environmentally friendly practices in Polish agriculture is ceasing to be a postulate of idealists, and is increasingly becoming a viable way to increase the competitiveness of farms. Importantly, these benefits are measurable - both in ecological and economic terms. Selected examples confirming this trend are presented below.

No-till farming - less plow, more profit

Nie trzeba wierzyć na słowo – wystarczy wyjść zobaczyć realne przykłady. Gospodarstwo w Wielkopolsce (300 ha) od dwóch sezonów zrezygnowało z klasycznej orki na rzecz uprawy bezorkowej, stosując Amazone Ceus-2TX, który pozwolił ograniczyć spalanie paliwa o 30%. Zamiast czterech przejazdów wystarczają dwa – a czas spędzony na polu skraca się proporcjonalnie. W efekcie paliwo kupione na zapas wystarcza teraz na dwa tygodnie dłużej, a w kieszeni pozostaje dodatkowo 12–15 tys. zł rocznie.

W Niemczech, gdzie uprawa bezorkowa ma już ugruntowaną pozycję, rolnicy doceniają maszyny takie jak KUHN Performer 4000, które znakomicie radzą sobie z rozdrabnianiem ogromnych ilości resztek po kukurydzy. Dzięki temu gleba szybciej „trawi” słomę i obornik, co przekłada się na ograniczenie ryzyka wystąpienia chorób, lepsze wykorzystanie składników pokarmowych i wyższe plony – bez konieczności dodatkowych nakładów na nawozy.

Polscy rolniczy coraz częściej przekonują się, że odejście od tradycyjnego pługa to nie tylko ekologiczny kaprys, ale przede wszystkim prosty rachunek ekonomiczny. Dzięki modelowi uprawy bezorkowej, który można wdrażać w dwóch wariantach, rolnicy osiągają realne oszczędności: mniej paliwa, krótszy czas pracy, a przede wszystkim – lepsza kondycja gleby. To wszystko przekłada się na większe zyski i stabilność ekonomiczną gospodarstw.

Dairy biogas plants in the Podlasie region

Milkkovita is an example of how in agribusiness ESG is becoming a necessity and a strategic business decision with a high rate of return. The example of a modern biorefinery shows how agriculture can effectively respond to environmental, social and regulatory challenges, striving for a balance between economic growth, improved quality of life and care for the environment.

In the context of environmental challenges, the installation in Wysokie Mazowieckie, officially opened in 2024, enables full utilization of organic waste, i.e. tailings, whey and other residues from dairy production by converting them into biogas. Thanks to this, Mlekovita significantly reduces its impact on the environment, achieving a reduction in CO₂ emissions by 9,500 tons per year.

Fabryka Biofermentacji przynosi wymierne zyski. W ciągu pierwszych 12 miesięcy (od maja 2024 r. do maja 2025 r.) wygenerowała 11,2 GWh energii elektrycznej oraz 10,8 GWh energii cieplnej, pokrywając 30% zapotrzebowania energetycznego całego zakładu. Świadczy to o tym, że inwestycje proekologiczne są rentowne, zwiększają bezpieczeństwo energetyczne i przewidywalność kosztów operacyjnych, co jest kluczowe dla stabilności biznesu i daje przewagę dzisiaj oraz zapewnia stabilność na przyszłość.

Mlekovita, as a leader and pioneer in the dairy industry, has for at least a decade been implementing pro-environmental solutions that serve as a model for other companies. This approach demonstrates conscious management of resources and responsible business creation, which is fundamental in the face of increasing regulatory requirements and social expectations for agribusiness.

Regenerative agriculture in Greater Poland

Another great example is Jagrol Farm, which is actively pursuing and developing a regenerative soil management system. Activities here focus on improving the water holding capacity of the soil, which is achieved by maximizing water retention, minimizing tillage operations and significantly reducing the use of artificial fertilizers. Instead, Jagrol relies on organic fertilizers and green catch crops, which not only enrich the soil, but also double its water storage capacity and mitigate the effects of climate change.

Concerned for the environment, Jagrol also uses mid-field shelterbelts, which have been shown to reduce erosion by as much as 50%. Precision farming allows for detailed soil testing and adjustment of agrotechnology, including pH regulation, to changing conditions in fields divided into plots of several hectares.

What sets Jagrol apart in the region is its extensive system of retention. The company has 140 hectares of retention reservoirs Together with full irrigation infrastructure. Professional pledges make it possible to accumulate about 900 thousand m³ of water, allowing to irrigate twice the area of fields cultivated for potatoes. These reservoirs, in addition to their irrigation functions, significantly affect the microclimate and have become a habitat for numerous species of water and mud birds, attracting ornithologists and enriching local ecosystems. All these activities effectively increase yield potential, reduce costs and secure profit, while regenerating the environment.

The examples indicated show that innovations in Polish agriculture - from no-till farming techniques to local biogas plants to digital farming platforms and regenerative practices - are producing measurable results. Increased soil organic matter, reduced greenhouse gas emissions, reduced fertilizer costs or in-house energy production are not visions of the future, but practical and quantifiable results that are becoming the foundation of modern, sustainable agriculture in Poland.

Corporate governance - transparency as currency

In a world where stock market investors scrutinize ESG reports with the same attention as financial statements, corporate governance is no longer the domain of large corporations. The CSRD, while primarily covering large entities, is creating a domino effect. Farmers and processors who supply them with raw materials must adapt to the new realities. The EU taxonomy, in turn, defines what „green investment” really means. A farmer who invests in agroforestry, for example, can count on preferential loans because his business meets strict environmental criteria (EU Regulation 2020/852). Banks already understand this and offer „green financing” with a margin depending on the results of implementing sustainable solutions, production technologies or investments. So ESG is not just a whim of regulators, but a new market reality where transparency is becoming currency.

A compass in the fog of change

The EU's farm-to-table strategy is all about specific targets, which include reducing pesticides by 50%, fertilizers by 20% and 25% of acreage under organic crops by 2030 (European Commission, Farm to Fork Strategy, 2020). This sounds abstract to many farmers, but it represents a huge opportunity for innovators.

It is worth mentioning at this point the so-called. Omnibus directives, which, although less media-oriented than the CSRD, introduced a number of facilitations and simplifications in the use of EU funds, including for pro-environmental and social investments in agriculture. The Omnibus, for example, allowed a more flexible approach to direct payments, simplified procedures for small farms, and greater freedom to implement sustainable development measures (Source: Regulation of the European Parliament and of the Council (EU) 2017/2393). This allows farmers to implement ESG innovations more quickly, taking advantage of simplified financing and project settlement paths.

Mention should be made of the Due Diligence Directive, which, although still in the implementation phase, is already impacting supply chain relationships. Large processors are increasingly requiring evidence of ethical and responsible sourcing from their suppliers. Such requirements act as a mechanism to protect against reputational risk, which in today's environment can cost a company hundreds of millions.

How do you prepare for these changes? The first step is to measure key sustainability indicators - such as carbon footprint, water consumption or compliance with regulations on decent and safe working conditions. Even simple tools, such as Cool Farm Tool, provide an initial picture of the situation and pinpoint areas for improvement.

Next steps include optimizing fertilization and crop protection strategies, improving health and safety standards, or implementing a code of ethics at the company. The key is not to wait for the mandatory implementation of new regulations, but to act preemptively. It is worthwhile to develop a solid plan, implement it consistently, and in this way build a competitive advantage and protect the company against risks.

Sustainability in agriculture - from strategy to implementation

Leading agricultural groups are already setting directions for smaller players in the sector to follow. Milkkovita, by investing in biogas plants and programs to support local communities, is not only effectively reducing emissions, but is also building a crisis-proof brand. Tymbark, with its quality and safety systems and systematic audits, is gaining the trust of both consumers and business partners.

For smaller units, the road to ESG implementation may seem challenging, but remains entirely feasible. It is worth starting with a detailed analysis of key areas, such as greenhouse gas emissions, water management, employment and occupational safety, fertilizer and pesticide application practices, and community relations. It is important not to try to make changes in all areas at once, but to do so gradually.

Available support, such as advice from Farm Advisory Centers, RDP funds, sustainable financing or dedicated digital platforms, can significantly facilitate ESG implementation. It is a process that resembles an obstacle course, but each successive step, even a small one, brings the farm closer to achieving its sustainability goals.

A necessity that creates value

Sustainability in agriculture is not a fad or a „green marketing” tool. Today it is an obligation arising from the physics of the planet, the expectations of society and the logic of the market. At the same time, it represents a huge opportunity for agriculture. Companies that already invest in sustainable practices gain a competitive advantage - lowering production costs, gaining access to green finance, building consumer loyalty and increasing resilience to crises.

A farmer who takes care of the soil achieves better yields. A processor that treats employees fairly has a more stable workforce. A cooperative that engages the local community creates a brand that will last for generations.

There is no time for hesitation anymore. Climate change is accelerating, regulations are coming into effect, and consumers are making informed purchasing decisions. ESG acts like a compass pointing the way in a world full of uncertainty. It is better to start with small steps than to wait for changes to take us by surprise. We shape the future of agriculture today - in every field, in every decision, in every ESG report. It is not just a choice, but a responsibility and a unique opportunity.

Sources:

• FAO 2024 Report https://www.fao.org/statistics/highlights-archive/highlights-detail/greenhouse-gas-emissions-from-agrifood-systems.-global–regional-and-country-trends–2000-2022/en?
• Regulation of the European Parliament and of the Council (EU) 2017/2393 (Omnibus)https://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX%3A32017R2393
• European Environment Agency, 2023 https://www.eea.europa.eu/en/analysis/indicators/greenhouse-gas-emissions-from-agriculture?
• European Commission, „Farm to Fork Strategy,” 2020 https://food.ec.europa.eu/horizontal-topics/farm-fork-strategy_en
• Women's role in greening European agriculture https://projects.research-and-innovation.ec.europa.eu/en/horizon-magazine/seeds-change-womens-role-greening-european-agriculture?
• IUNG-PIB, „Report on Agricultural Drought in Poland 2022”.” https://www.iung.pl/2022/09/15/klimatyczny-bilans-wodny-dla-okresu-od-11-lipca-do-10-wrzesnia-2022-roku/
• EU Regulation 2020/852 (Taxonomy)https://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX%3A32020R0852
• Dyrektywa CSRD https://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX%3A32022L2464

See also: AI in agro marketing - facts, myths and practice in Poland

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