Indoor Farming Industry ESG Thematic Report, 2023

ESG (Environmental, Social, and Governance) in the Indoor Farming Industry

Sustainable investments have become key trends in recent times, where the corporations, governments and consumers are striving to make a change in an impactful manner.

The indoor farming industry is perceived as an alternative to the conventional and traditional method of farming. The key leaders of the market use alternative sustainable methods of producing the food materials in a more environmentally efficient manner i.e., methods which are more efficient in terms of usage of natural resources and cause less strain to the environment are used to produce the food, thereby promoting eco-friendly farming and promoting food security.

The methods of the markets are projected as more sustainable than that of a normal, orthodox method of agriculture and farming.

ESG Trends

The indoor farming industry methods are fundamentally eco-friendly, where the plants are grown in a controlled atmosphere, reducing different risks pertaining to the farm produce and natural resources.

A wide range of methods such as hydroponics, a method which is quoted as a sustainable method to fight climate change and reduction of environmental damage are used in Indoor Farming. According to reports it has been stated that the yield is more than 20-25% that of traditional farming, making it ecologically and economically viable and conserving fresh waters. Further, studies have indicated that hydroponics farming uses at least ten times the less water than that is used in traditional farming.

In the hydroponics, the atmosphere is controlled and the chances of weed plants growth and pests and insect growth is less to nil. Hence, the usage of chemical fertilizers as well as the pesticides is zero, thereby reducing the damage to soil.

Since the hydroponics products are locally produced and distributed, the value chain impact on the environment is nil, as it doesn’t include the logistics and storage, which is used in the conventional farming products value chain, thereby lessening the emissions.

Key leaders of the industry also use aeroponics, the nutrients such as nitrogen, phosphorus, Sulphur, calcium, magnesium and potassium are sprayed to the plants in the form of mist, thereby reducing the use of soil, preserving and conserving the soil. The stated technique of farming is reported to reduce the risk of pests and plant diseases. The methods such as aquaponics, where fishes are used for nurturing the plants. The said method is stated to have 50% lesser environmental impact than that of the conventional farming and agricultural methods.

The aforementioned methods of indoor farming industry are reported to help in reduction and offsetting the environmental damage happening in the urban areas, as well as increases the local production of the food, helping the local communities i.e., the promotion of food security as well as the reduction of Greenhouse Gas, impacting the social part of the ESG along with environment, thereby promoting the United Nations Sustainable Development Goals (UN SDG) of food security i.e., SDG 2 and SDG 13 (Climate Action).

Growth of the Indoor Farming Market

The indoor farming market globally is valued at USD 39.5 billion as of 2021 and is forecasted to expand with a CAGR (Compound Annual Growth Rate) of 13.5% from 2022 to 2030. Increasing awareness amongst the key leaders of the market in terms of environment and usage of ecologically sustainable methods such as hydroponics and aeroponics are key factors in the ESG arena of the market.

Key Companies in this theme

    • Argus Control Systems Ltd.

    • Certhon; General Hydroponics

    • Hydrodynamics International

    • Illumitex;

    • LumiGrow

Scope of the Indoor Farming 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 Indoor Farming Industry ESG Thematic Report

    • Offers a global perspective of indoor farming market 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.