Seed producer KWS and Deloitte Germany worked to develop a sustainability strategy that builds resilience in the face of the urgent challenges of climate change.
There is growing pressure for companies to act around the issue of sustainability, especially with the adoption of the EU Green Deal in 2019, which aims to create a Europe-wide transition to a modern, resource-efficient, and competitive economy.
But what is the best way to strategically integrate sustainability into a business? How will this affect non-financial reporting, the product and service portfolio, and the overall business model? Together with KWS, Deloitte Germany analyzed these challenges, developed innovative solutions, and successfully implemented them.
KWS's customers, specifically farmers, are finding themselves in an increasingly challenging situation with few viable solutions. First, there is a growing demand from consumers for environmentally friendly and affordable food sourced from agriculture that preserves food diversity and avoids the use of chemicals.
This is in tandem with new regulatory requirements which are continually changing the conditions under which farmers operate. For example, legislators and regulators are restricting agricultural inputs by limiting the use of fertilizers to 80 percent of crop requirements or banning certain classes of pesticides entirely.
Agricultural operations are also facing increasing bureaucracy, compliance, and governance requirements, particularly in Europe. The EU's farm-to-fork strategy within the Green Deal regulates, in detail, environmental measures for preserving biodiversity and cultural landscapes.
KWS recognizes the challenges and changes caused by climate change: Its core business is to develop increasingly high-yielding seeds that are ideally adapted to the changing climatic
conditions each year, while at the same time helping farmers continue operating successfully in a challenging market.
This set of unique challenges led KWS and Deloitte Germany to develop strategic options for a sustainable approach that goes far beyond simply increasing variety yields by one to two percent per year.
What is the best way to strategically integrate sustainability into a
"We provide our clients with a holistic support – from regulation to analysis to implementation – to help them develop sustainable solutions and integrate them into their processes and ways of working."
Dr. Thomas Schlaak, Partner, Sustainability Consulting, Deloitte Germany
Developing a solution to sustainably transform KWS itself and prepare for future regulatory, social, and environmental challenges was vital but it was also important to leverage the potential of KWS' business to make a sustainable contribution as part of the agricultural value chain.
Opportunities were identified around developing new varieties and crop rotations that are better able to cope with upcoming challenges such as periods of drought or disease which could reduce the need for pesticides, fertilizers or water. KWS could also supplement its product lines with complimentary services. The use of modern technologies, for example, offers numerous opportunities for optimization. Intelligent systems, developed in cooperation with start-ups and sensor manufacturers, can optimize both the environmental and the economic aspects of farming, with additional concepts ranging from online soil analysis and crop rotation optimization to optimal fertilization or pest control.
"Sustainability@KWS" collaborated with international and cross-functional teams to analyze their carbon footprint based on existing data and draw up recommendations for the company’s future non-financial reporting. Product characteristics that increase resilience against climate change and sustainable approaches for new products and services were defined. These will be implemented in a 10-year plan and are part of KWS' Sustainability Initiative 2030.
This visionary project has enabled us to demonstrate that Deloitte is placing sustainability front and center across all sectors. We provide companies from all industries with holistic support to help them develop sustainable solutions and integrate these into their processes and ways of working.