Smart Agriculture Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Smart Agriculture Industry

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

Companies in the smart agriculture industry revolutionized the farming of crops creating a positive impact on the environment and social aspects of the ESG. In the market, the companies aim at improving the quality and quantity of the food products and reduce the negative impact on the environment, enabling food security across the globe. Smart Farming promotes the efficient usage of technology and conservation of environment.

Factors such as food insecurity, scarcity of natural resources and population explosion as well as access to technology has impacted the industry in terms of ESG, creating a socio-economic impact at global scale.

ESG Trends

Smart agriculture uses technologies like drones, sensors, and cloud computing to enable companies in this market to operate the farm precisely, making optimum use of natural resources like water. Farming Internet of Things (IoT) has enabled companies in the Smart Agriculture industry to create quality products and increase in quantity. The farming IoT has enabled the farmers to allocate the resources precisely to each plant, thereby increasing the yield. Smart greenhouses are one of the kinds of Smart Farming industry, where automation is involved, eliminating the human intervention and increases crop yield by setting the water consumption, conserving the fresh waters. This method uses renewable sources of energy like geothermal energy, solar energy to heat and cool the growth environment.

Smart greenhouses in terms of infrastructure don't occupy much land, unlike conventional methods of agriculture, and need less to no soil, conserving the soil and the nutrients. Further the method of greenhouse farming reduces the carbon footprint since no fuel powered support machine is used. Since the area of greenhouse farming is closed, the plants are maintained in hygienic methods, eliminating the risk of food contamination and air borne illness to the plants, promoting food safety, thereby achieving the UNSDG goal of zero hunger. Products offered in this market have improved nutritional values of the yield products, creating a positive impact on social health.

However, challenges in terms of ESG in the industry lies in the areas of environment and social. The usage of internet of things for monitoring the farms, consumes a lot of energy for the processes, leading to increase in carbon footprint. One of the companies in the market has created a mixed source of energy, reducing the consumption of energy from natural sources.

In terms of the social aspect of ESG, the challenge arises in the form of access to technology. Since the core of the smart farming industry is technology, access to such technology requires a lot of cost, excluding rural areas to practice such advanced methods. This is a major challenge to the United Nations’ Sustainable Development Goal 10: reduced inequalities. 

Growth of The Smart Agriculture Market

Smart agriculture market as of 2021 was economically valued at USD 14.44 billion and forecasted to grow with a CAGR (compound annual growth rate) of 10.8% from 2022 to 2030. The need for achieving UNSDG goals as well as the exploitation of natural resources in conventional agriculture are some of the core factors that drive the Smart Farming Market in terms of ESG.

Key Companies in this theme

    • Ag Leader Technology

    • AGCO Corporation

    • AgJunction, Inc.

    • AgEagle Aerial Systems Inc.

    • Autonomous Solutions, Inc.

    • Argus control systems

Scope of the Smart Agriculture 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 Smart Agriculture Industry ESG Thematic Report:

    • Offers a global perspective of the 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.