How JTI is Driving a More Resilient Supply Chain
This is the second article in a two-part series. To read the first article, click here.
The word ‘sustainability’ is bandied around so frequently nowadays that it almost loses its meaning.
“There are so many buzzwords when people talk about sustainability, but for us it’s a value stream because it creates value for our business and it is critical for our future,” says Paulo Saath, Global Head of Leaf Operations at JTI.
Paulo’s team at JTI refers more frequently to ESG rather than sustainability, encompassing clear governance processes, identifying and prioritising the challenges and establishing relevant response measures to social and environmental matters impacted through its own operations, while also working closely with growers.
“I personally cannot talk about this subject without discussing soil quality and productivity, because it is so critical to ensure we have the right product,” he continues. “We also strive to use energy efficiently and from renewable sources where feasible.
“It’s all interconnected, which is why we call it ESG in our function. For us, it’s a business activity. It’s not something we only look at when we have time because it’s critical for our business.”
Paulo is keen to highlight the all-important “human element”, which translates as safeguarding the future of farming by educating the next generation and ensuring they grow up in an environment where they can go to school and study.
Reflecting on his childhood, he says: “If my parents hadn’t put in the effort to ensure I had access to quality education, I wouldn’t be here talking about supply chain.
“For me, education is the transformational force that can not only enhance livelihoods, but also change countries. Look at how much poverty Brazil had in the 1970s and 1980s when I was growing up and how agriculture and the investment in research and technology has helped it advance and become more productive and improve livelihoods.”
‘No magic bullet’ for sustainability
Paulo is incredibly fortunate in being able to count on a team which is passionate about strengthening relationships with its contracted growers and responds well to the challenges ahead with clear strategies, focus and KPIs.
This includes the realm of ESG, which is one of five value streams in leaf supply chain and has clear associated metrics – for example, a roadmap to reduce CO2 emissions towards achieving net zero in the longer run.
Paulo holds the view that the company’s supply chain function is critical within the business to drive innovation and make a positive impact towards a more sustainable future.
“We know some of the challenges are quite complex and we can only achieve them with science,” he outlines. “That’s why we have a strong R&D function in our leaf operations that not only supports quality and farmers’ productivity, but also assesses the potential impact of our initiatives.
“When you talk about ESG – especially in agriculture – there is no magic bullet that will fix the social or environmental challenges. Everything has a trade-off; therefore, you need an integrated approach to evaluate whether the gains are going to be bigger.”
Despite the pressing need for global action, Paulo emphasises that sustainability is a marathon rather than a sprint: today’s actions need to have a positive impact in the short, medium and long term.
He is also unequivocal about the need to establish clear lines of communication with team members, working together to set achievable goals and find solutions to problems that arise, while leveraging technologies and data to objectively measure progress.
“Besides our investments in R&D, we will also make substantial investments in technologies, systems and advanced analytics to collect, process and analyse data effortlessly,” Paulo says. “The use of AI also helps us better predict outcomes and model innovative solutions for our business and our growers.”
In JTI’s case, meeting goals is all-important from business, social and environmental perspectives. Soil depletion has the potential to be particularly damaging to productivity, yields, income and farmer livelihoods, so identifying best practices and training both agronomy experts and the company’s contracted growers is critical to success
“There’s a lot of farmer succession with our growers and many times, like in the case of my family, land is passed from parents to children,” Paulo details. “We say, ‘don't leave only a deed to your children – leave them quality soil’, because, without good soil, the deed becomes almost irrelevant.”
Striking a balance
Reflecting on the evolution of agriculture, Paulo highlights the rush for chemical-based solutions as the baby booms of the 20th century meant finding ways to feed millions more people.
Thanks to science, innovative solutions have been discovered over the years, showing that nature responds much better to alternative solutions. Some initiatives like crop rotations, cover crops, minimum or no tillage, to name a few, are initiatives that are being implemented to reduce soil erosion and recover soil quality and fertility.
“Again, there are always trade-offs,” Paulo concludes. “You cannot completely discontinue one model and the next day transition to the other model. It’s how you rebuild the quality of the soil and how you rebuild fertility that will enable you to reduce chemical usage and enable the farmer to have a sustainable income while positively impacting the planet.
“To me, it doesn’t make sense to talk about ESG without talking about economic development. Farmer profitability is important to advance in the ESG requirements in the supply chain.”
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