Archer Daniels Midland: A Sustainable Supply Chain for Agribusiness

MONDAY JUN 1, 2009

The Challenge

As one of the largest agricultural processors in the world—producing food, feed, and bio-energy products—Archer Daniels Midland (ADM) addresses one of the world’s most pressing challenges: meeting the growing global demand for agricultural products, while balancing the need to use such resources for food, fuel, or animal feed, and minimizing environmental degradation. Seeking guidance as it navigated these interconnected issues, ADM engaged BSR, beginning in 2007, to help the company align its supply chain management with best practices in social and environmental stewardship.

Our Strategy

Over the course of nine months, BSR assessed key commodities in ADM’s supply chain, evaluated the impacts of related operations on the environment, helped the company understand stakeholder views, and recommended options for maximizing sustainability in the years to come.

BSR’s supply chain assessment included several steps. First, we analyzed the sustainability impacts for three commodities (corn, palm oil, and soy) in the key countries where they are grown: Brazil, Indonesia, Malaysia, and the United States.

Next, BSR sent teams to observe growing and harvesting practices at individual farms in these countries. To obtain a complete picture of the production, processing, and traceability of the three crops, BSR team members interviewed a variety of stakeholders at local and global levels, including farmers, production managers, key staff within ADM, and NGO leaders.

Finally, BSR used the information gathered in these steps, and our expertise in food and agriculture supply chain issues, to develop detailed recommendations for ADM. We provided executive-level guidance on the commitments and structural changes necessary to further integrate sustainable business practices into ADM’s culture and operations, as well as advice related to commodities production—such as how to increase stakeholder engagement and align with sustainable sourcing criteria.

Our Impact

With BSR’s guidance, ADM is taking several important steps: building capacity in its various sourcing regions by hiring local people with sustainability expertise; developing partnerships with local experts to reduce deforestation, prevent the loss of local land rights, advance sustainable growing practices, and improve working conditions; and working with supply chain partners in multi-stakeholder initiatives to establish certification schemes for palm and soy production. Finally, ADM has enhanced roles, responsibilities, and structures inside the company to anticipate sustainability risks and opportunities more effectively—and deliver value everywhere it does business.