IFRS Foundation

Agricultural Products

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Current language: English
The Agricultural Products industry is engaged in processing, trading and distributing vegetables and fruits, and producing and milling agricultural commodities such as grains, sugar, consumable oils, maize, soybeans and animal feed. Entities sell products directly to consumers and businesses for use in consumer and industrial products. Entities in the industry typically purchase agricultural products from entities that grow such products (either directly or indirectly) to then conduct value-adding activities (for example, processing, trading, distributing and milling). Agricultural products entities also are involved in wholesale and distribution. Entities in the industry may source a substantial portion of agricultural commodities from third-party growers in various countries. Therefore, managing sustainability risks within the supply chain is critical to securing a reliable raw materials supply and reducing the risk of price increases and volatility over the long term.

Relevant Issues (7 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Agricultural Products

GHG Emissions
  • Greenhouse Gas Emissions

    Entities in the Agricultural Products industry generate direct greenhouse gas (GHG) emissions from processing and transporting goods via land and sea freight operations. Emissions regulations may increase the cost of capital, operational costs and affect the operational efficiency of entities without strategies to manage GHG emissions. Employing innovative technologies that use alternative fuels and energy inputs—including biomass waste generated from internal processes—and improving fuel efficiency are ways entities can limit exposure to volatile fuel pricing, supply disruptions, future regulatory costs and other potential consequences of GHG emissions.
Energy Management
  • Energy Management

    Processing and milling agricultural products require substantial energy input. While some agricultural products entities generate energy on-site through the direct combustion of fossil fuels or biomass, most energy is procured from the electrical grid. Energy consumption contributes to environmental impacts, including climate change and pollution. Energy management affects current and future costs of operation. Climate regulation and other sustainability factors could result in higher or more volatile electricity and fuel prices, increasing operating costs for agricultural products entities. Therefore, energy efficiency gained through process improvements can lower operating costs. The trade-off between on-site versus grid-sourced electricity as well as the use of alternative energy can play important roles in influencing both the long-term cost and reliability of an entity’s energy supply and the extent of regulatory impact from direct versus indirect emissions.
Water & Wastewater Management
  • Water Management

    The Agricultural Products industry relies on water for processing activities, and entities in the industry also typically generate wastewater or effluent. The availability of water, because of physical availability or regulatory access, directly impacts the industry’s ability to operate processing facilities efficiently. Entities in the industry increasingly are exposed to water-related risks and regulations, which may increase capital expenditure costs, operating costs, remediation costs or potential fines. Entities can manage water-related risks and opportunities and mitigate long-term costs through capital investments and assessment of facility locations relative to water scarcity risks, improvements to operational efficiency, and work with regulators and communities on issues related to water access and effluent. A separate supply chain-oriented topic, Ingredient Sourcing, addresses the risks related to crop production driven by water availability and access.
Product Quality & Safety
  • Food Safety

    Agricultural products are either sold directly to consumers in raw form or are further processed before reaching consumers. Maintaining product quality and safety is critical, as contamination by pathogens, chemicals, or spoilage presents serious human and animal health risks. Contamination may result from poor farming, transport, storage, or handling practices. Food quality and safety issues can lead to consumer-driven demand changes and regulatory action. Product recalls can harm brand reputation, reduce revenues, and lead to costly fines. Obtaining food safety certifications or ensuring suppliers meet food safety guidelines may help entities in the industry safeguard against product safety risks and communicate the quality of their products to buyers.
Employee Health & Safety
  • Workforce Health & Safety

    Industrial processes used in the Agricultural Products industry present significant occupational hazards. Employees are engaged in many labour-intensive activities. Common hazards include falls, transportation accidents, equipment-related accidents, and heat-related illness or injury, among others. Violations of health and safety standards could result in monetary penalties and costs for corrective actions. High injury rates, particularly fatality rates, may indicate a weak governance structure and a weak workplace safety culture, as well as lead to significant reputational harm. Strong performance on managing workforce health and safety can help build brand image while promoting worker morale, which may lead to increased productivity, reduced worker turnover, and enhanced community relations.
Supply Chain Management
  • Environmental & Social Impacts of Ingredient Supply Chain

    Agricultural products entities source agricultural inputs from a large number of suppliers. How entities in the industry screen, monitor, and engage with suppliers on environmental and social topics may impact consumer demand, reputational risks, and the ability of entities to effectively manage their crop supply and respond to price fluctuations. Supply chain management issues related to labour, environmental practices, ethics, or corruption may result in regulatory fines and/or increased long-term operational costs for entities. Similarly, agricultural products entities may face reputational damage if their suppliers perform poorly on environmental or social issues. Entities can mitigate these risks and potentially increase consumer demand or capture new market opportunities by engaging with key suppliers to implement sustainable agricultural practices or source from certified suppliers.
  • GMO Management

    Agricultural products developed using genetically modified organism (GMO) technology have gained increasing consumer interest. While GMO technology has, in many cases, enabled improvements in crop yield through development of disease or drought resistant traits in plants, there is increasing consumer concern on the perceived health, environmental, and/or social impacts related to the cultivation and consumption of GMOs. Certain countries and geographic regions have also enacted regulations that ban the usage or cultivation of GMOs. Food and beverage entities along the food supply chain, including entities in this industry, are seeking effective means to assess GMO-related risks and opportunities, and communicate with consumers on the topic. Agricultural products entities that are able to meet changing consumer trends and regulatory changes through their product mix or effective communications may reduce potential reputational risks and revenue loss as well as capture new market share opportunities.
Materials Sourcing & Efficiency
  • Ingredient Sourcing

    Agricultural products entities source a wide variety of commodities and ingredients from farmers or intermediary distributors. The industry’s ability to reliably source ingredients at desired price points fluctuates with crop yield, which may be affected by climate change, water scarcity, land management and other resource scarcity considerations. Entities that source more productive and less resource-intensive crops, or those that work closely with suppliers to increase their adaptability to climate change and other resource scarcity risks, may reduce crop price volatility and crop supply disruptions. Additionally, entities may improve their brand reputation and develop new market opportunities. Failure to effectively manage sourcing risks can result in higher costs of capital, reduced margins and constrained revenue growth.

Select up to 4 industries

Current Industry: Agricultural Products

Food & Beverage
Consumer Goods
Extractives & Minerals Processing
Health Care
Renewable Resources & Alternative Energy
Resource Transformation
Technology & Communications

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