Agricultural Equipment Industry ESG Thematic Report, 2023

Environment, Social and Governance (ESG) in the Agricultural Equipment Industry

Environment, social and governance are three diverse non-financial factors that are pushing the investment trend to become more inclusive, responsible. 

Industry leaders of the industry, which revolutionized the farming of crops, are striving to create a positive impact on the environmental aspect of the ESG. The machinery used for farming has created a challenge in terms of the environment for the market. Historically, the machinery used for farming was reported to produce good yield. However, over a period of time, the adverse impact on the environment due to the usage of the machines and the scarcity of natural resources has impacted the industry in terms of ESG.

Introduction of emission policies across the globe, in continents and countries, to reduce the emissions from the machineries have impacted the market in terms of ESG. The United Nations’ Sustainable Development Goals (UN SDGs) is a comprehensive framework that helps companies in this market obtain a perspective on the impact of their products and operations on ESG parameters.

ESG Trends

A wide range of mechanical products of agricultural equipment products have caused distress on the environment through carbon emissions. Different kinds of agricultural methods such as conventional and smart agriculture have been reported to use the machines such as trucks, tractors and harvesters as tools for industrial scale production.

To produce the heavy industrial machinery for the agricultural equipment industry, an intense amount of raw materials such as steel, iron, plastic, rubber and copper are required. The mining of metals has been reported to cause distress to the environment in different aspects such as, carbon emissions, water and air pollution.

Further, for operational purposes, plastics and rubber which are used as part of product, are sourced from crude oil and trees further cause adverse impact on environment. Some of the companies in the market to reduce the impact, have embedded the circular economy policy as to reduce the consumption and dependence on the raw materials.

The Scope 1, Scope and Scope 3 emissions from the global value chain are another set of factors that impact the market adversely, which contain carbon as a part of emissions from the fuel, contribute to positively to the climate change in contrary to the United Nations Sustainable Development Goals of climate action (SDG13).  

Usage of fossil fuel for powering the machine for the operation is another challenging factor in terms of environment for the market. Although certain studies have indicated the use of alternative energy sources, at present, a large part of the products of the market are designed to run on fossil fuels, straining the environment at large, in contrast to the UN SDG goals of climate action.

In contrast to the negative aspects of the market in terms of the environment of the ESG, the agricultural equipment industry creates a positive effect on the social scale in terms of promoting food security. Precision planters are known to plant the seeds precisely, eliminating the seed waste and ensuring that the plants don’t choke up as they grow.

Further machines such as seed drills properly sow the seeds into soil and protect seeds from the birds, ensuring minerals and nutrients from the soil are absorbed by the seed. Further harvesters are reported to separate the weed from the crop and provide cleaner grains and yield, reducing the crop damage. These technologies, therefore achieving food security and promoting the UN SDG goals of zero hunger (SDG2).

Growth of the Agricultural Equipment Market

The agricultural equipment market at global scale was valued at USD 155.68 billion as of 2021 and is forecasted to expand with a CAGR (compound annual growth rate) of 5.0% from 2022 to 2030. Although there are certain challenges in terms of environment in the market, policies related to emissions such as Euro 6 at European scale sets standards for the emissions and pertaining to India Bharat Stage 6 emissions are some of the policies that direct the market, by reducing the emissions from the machines. further technological development in the market has contributed to the promotion of the UN SDG goal of zero hunger (SDG2).

Key Companies in this theme

    • AGCO Corporation

    • Fliegl Agro-Center GmbH

    • Agromaster; Amazon Inc.

    • APV GmbH

    • Bellota Agrisolutions

Scope of the Agricultural Equipment Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Aspects of the Agricultural Equipment Industry ESG Thematic Report

    • Offers a global perspective of the agricultural equipment industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.