Interview transcript
Teymoor Nabili
Let’s begin by talking about just how does Unilever engage, and to what extent, with the agro-economy in this region?
Dave Ingram
Firstly, it’s a very important part of our business. Our products are related to roughly 3 million hectares of agricultural need. We’re a very big player in palm, both for our home care and our personal care business, and a little bit for our foods business. This region particularly, we’re heavily invested in coconut sugar, wonderful business in Indonesia, and coconut oil in the Philippines generally. It’s a very important part of our business, an important part of the supply chain we run. Engaging with large players is important, and equally engaging with smallholders directly is a fundamental part of our strategy going forward.
Teymoor Nabili
To what extent? A global company like yours presumably doesn’t get right down to the smallholder level, or do you?
Dave Ingram
You have to because they are such a large part of the sourcing in this region, and they’re such a large part of the integrity of the sourcing in this region. We work directly with a large part of the smallholder network, particularly Indonesia, obviously, and Malaysia. We feel that they are the ultimate stewards of the land. And when we look at what our consumers are increasingly asking for, they want to know, where was it sourced? Which farmer, which field? What impact has that had on the landscape, if any? And sometimes even what’s the financial impact, the financial flowthrough?
Teymoor Nabili
What have you found? What are the common themes that you’re hearing from these farmers? What are the challenges and the opportunities that you as Unilever see in those engagements?
Dave Ingram
I think fundamentally, you see that it’s a tough life for smallholders. They’re absolutely at the behest of commodity pricing, weather systems. In the last two years, we’ve seen the dramatic effects of COVID affecting labor forces coming into this region and being able to grow things like palm or yield things like palm. You start to understand the difficulties; the ups and downs of a smallholder’s life are very dramatic. If you were just operating six steps down, you’d see a far smoother connection with your direct suppliers. It’s been good to understand that, good to understand the opportunities within that. We know that smallholders operate, roughly speaking, at half the yield of crop than large-scale, professional systems of companies, larger-scale companies. So there’s an opportunity, because if we can work and help educate the smallholder, we can avoid them using more land for the same crop. We get better yields for them, they get better income.
Teymoor Nabili
Let’s pick that apart for a second. You’re saying that their yield is smaller because of a lack of education? And they compensate for the smaller yield by growing their actual geographical footprint rather than increasing their productivity?
Dave Ingram
Yeah, depending on whichever crop it is. But it can be a mixture of, they don’t have money for fertilizer at a given time of the year, they don’t have money for the right irrigation of a particular crop, they don’t have the training and education to know exactly how to optimize yield within a crop. And therefore there’s opportunity in change and helping them change that for themselves.
Teymoor Nabili
Unlocking the potential that exists for increasing their yield… how do we do that? You’ve named a couple of elements that are key to that happening, but in practical terms how does one actually implement the solution?
Dave Ingram
Firstly, it’s fundamentally important that companies like us understand that source. Without being able to identify that source, you can’t include that farmer in your thinking. So firstly, understand the source, include the farmer into the system, and then help them through educational mechanisms. We’ve had real examples in the last four or five years, working in the enhancing livelihood fund, we’ve worked with partnerships where ourselves and our partner companies are going to educate the farmer, in terms of best fertilizer, best timing, best way to irrigate, best way to harvest, that optimize their yields. We’ve done that in a number of our crops. We’ve had a lead partner in IDH working with us, across the world very successfully, and we see them and that system as a strategic driver of getting better yield and getting more security of supply without increasing the hectarage and the area that’s used for farming.
Teymoor Nabili
Is that an approach that will scale? One of the problems that we have consistently over the years, the decades, is that we can identify individual problems and we can propose individual solutions, but scaling it, unlocking the potential across a large area, is the trouble. How do you see that?
Dave Ingram
A third of all palm is handled by smallholders, so it’s a fundamentally large part of the volume that we want to access. We want to improve their yields so that we can get more volume from the same hectarage. It gives us direct knowledge of whether people are getting the right income for that, and the core of our sourcing has integrity with respect to deforestation control, particularly I’m talking in the palm sector.
Teymoor Nabili
You mentioned finance. And from the smallholder side, that’s one thing that you hear a lot of, is they’re unable to access, reliable, secure and consistent financing. What part do you play in that, can you play in that? Is it a major element of the engagement that you have?
Dave Ingram
A large part of the engagement we have is where we’re financing things directly, ensuring that that’s sustainable and for the long-term value. If you’ve got a farmer that’s producing half the yield that he should be producing, but they don’t have money to go to an education program to understand the difference, or they’re not having access to fertilizer at the right cost, that’s where we see the opportunity of financing, helping that farmer. For us that has to be, in that sense, sustainable, so that we know that the farmer can improve their operation and improve their yield to the point that his income is improving and he’s self-sustaining a better income through the education we’ve given him. And we finance the education or we finance the fertilizer costs or in some way help that process. But that’s where I think financing can help, and it can help at scale. It’s not just a highly targeted approach, it can help with scale.
Teymoor Nabili
In this growing awareness and acceptance and pursuit of ESG goals and ethics, are you seeing within Unilever and companies like Unilever a greater tendency towards collaborating with, I guess, competitors, even? Or are you still trying to address some of these problems specifically through a Unilever lens?
Dave Ingram
Yeah, spot on, I think we’re seeing every form of ecosystem of partnership. So that can be us and peers. And if you take responsible sourcing of palm oil or soy oil in Latin America, we’re doing that with peers, across industry, and improving the generic base of supply and ensuring that we’re raising the floor of that and the ceiling of those industries. It’s working with companies I mentioned before and communities and governments to try and help land right usage. So there’s clarity upon land rights for farmers. We’re also working with ecosystems of technology suppliers. Orbital Insight, Google we’re working with, their Earth Engine, to track and trace our supply and effectively have a digital copy of the land that we’ll be tracking and tracing. I can see that technology is going to disrupt in a positive way the integrity of sourcing across this full network. The ability for technology to track and trace at scale instantaneously is phenomenal. It’s been one of the largest joys of my job in the last three years, seeing how technology can make a difference in mapping the Earth, mapping the ecosystems of the Earth, overlaying that the mapping supply chains that are moving across those ecosystems.
Teymoor Nabili
Give me a specific example. What are you engaging with?
Dave Ingram
I mentioned earlier, we’re doing work with Google and with Orbital Insight. With Google, within their Earth Engine, we’re taking forest data, biodiversity data. We’re overlaying that data with supply chain data. We’re tracking a mobile phone, cell pings that are operating in and around fields and mills. We start to get an assessment of risk of where there’s been movement from a deforested piece of land into a mill that we’re operating with. And we start to instantaneously get risk statements of some things moved from that field, which we know is deforested into a mill that we’re operating with, that’s a risk for us that we would not have no visibility of before. So that technology is allowing us to map our full soy chain in Latin America, and our full palm chain in this region, within the space of months. And you start to get a very detailed insight as to your supply chain that you’re operating, which you’d never have seen before. And it’s part of an ecosystem of understanding your supply chain. It’s not the full thing, but it’s part of an equation of, the data is telling us this, our relationship with the farmers is telling us that, our people on the ground are telling us something, and we piece this together in terms of – is our supply chain, the highest integrity that we demand?
Teymoor Nabili
Are there technologies that you’re seeing out there at ground level, that are really exciting and really transformative? Stuff that you can put into the hands of the farmers themselves, or the groups within that ecosystem, to make things easier?
Dave Ingram
There is. In different crops we’re seeing great technology from any number of companies in terms of weather systems, water systems, soil health technology, that then can feed into specifically what fertilizer and where it should be applied. So the technology for farmers has developed incredibly over the last five years, particularly gives them much more insight into rather than blanket farming and blanket fertilizing, they can be much more fine-tuned about where do they put irrigation systems or fertilizer systems.
Teymoor Nabili
I’m just wondering if there is a shift in sensibility, a shift in the way that these things are now being considered compared to even five years ago?
Dave Ingram
I think so. I speak to many CPOs in different industries, and in our own sector directly. And in the space of sustainability there’s much more openness, I think, than five years ago that we should be doing things together. It makes sense that if we’re working with farmers in Medan and another company is working with farmers just next door that we leverage resources and tools and techniques to improve a wider community, a wider part of the community.
Teymoor Nabili
This may be a little speculative, but I just wonder where that might go. You were one of the major players originally with RSPO. The evolution of that organization and those interactions, can you talk me through that a little bit? Do you think that that we’re evolving into a different way of approaching these things? And how can we scale that particular approach and amplify that particular activity?
Dave Ingram
The RSPO has been this fantastic vehicle of including a very wide range of buyer peer companies and supplier peer companies, and improving the floor of how we operate within the prime industry. Ensuring inclusion of farmers, well-being of farmers, well-being of the land and nature that we’re operating within, has been fundamental. We see the same in soy, we work very closely in partnerships in tea. Those have been very influential in changing industries over the past 10,15, 20 years. And I think they’ll continue to evolve.
Teymoor Nabili
What about governments? Let’s bring in that aspect of the whole thing, because none of this regional activity can occur without governments – of individual nations and governments between nations being able to coordinate and collaborate on these things. What role can a government play to make life easier for the work that you’re trying to do, the stuff that you’ve been talking about?
Dave Ingram
We’re working very closely with ecosystems between ourselves, peer companies, companies like NGOs and with governments. And governments are helping enormously in terms of facilitation of data. Giving, where relevant, land data, land ownership data, that is fundamental to you then overlaying that with forest data, and you know who’s farming which piece of land around the world. So a lot of that they’re starting to work with us on. It’s not everywhere to the level that we’d want it to be.
Teymoor Nabili
It is one of the sticking points, it seems…
Dave Ingram
It’s one of the sticking points in some areas around the world where getting that clarity of data isn’t as good as it should be. But there’s many that are starting to move. There’s many that are starting to move.
Teymoor Nabili
If there was a particular element of government relations that you think needs addressing most urgently, what would it be?
Dave Ingram
One of the things particularly at the moment, and this is less about the link between climate and nature. So we’re all understanding that link between climate, nature and social is much more interconnected than we first thought. We thought there’s a climate agenda, a land development and protection regeneration agenda and a social agenda. They’re actually all interconnected. One of the challenges is the financing flows between these. So what you’re seeing in the world right now is huge money going into climate funds, availability of huge funds going into climate funds, and development of carbon credits around the world. The linkages between the fund where the money is, the credit, which is associated with the nature and the land in a particular country, and money going to actual farmers in a country, that needs governmental support for that equation to work properly. So we would like to see more integration of the financing between the availability of funds, the credit going to nature in farming, the link of doing better farming being good for climate; and the inclusion of the social agenda in that the smallholders who are seeing most of the turbulence – some of the poorest in the world are looking after that nature – and the money is flowing across that equation in a more equitable, circular way than it is today. That can only happen if governments are integrating, aligning their systems better than they are today.
Teymoor Nabili
Are you sensing that they are getting that message? Are you sensing that there is a momentum behind the intent? Or are you hoping to see more?
Dave Ingram
I’m hoping to see much more. I think they’re starting to sense it. I’m hoping to see more because we won’t solve the climate agenda without getting the nature agenda much more developed. We won’t solve the nature agenda without the credit agenda working well for nature and for farming. And we won’t solve farming unless we include smallholders into that equation and they see benefit from being a smallholder farmer by getting financial flow to them.
Teymoor Nabili
What do you think is holding it up?
Dave Ingram
I think it’s a complex thing, where you’ve got international funds of money and potential international credit systems versus localized and governmental systems. So how do you connect an international green credit scheme globally with any country in this region particularly, or in Latin America, or in Africa, where they’re getting the value of the credit from their land, not some international system. So how do we connect the cost and value of that credit to the local country and to the smallholder?
Teymoor Nabili
Which brings us back to the finance question. And one of the underpinning elements of this whole series of conversations is exactly that – is there a way in which we can solve this particular disparity if we can? Because the finance mechanisms tend to look at these opportunities, if you like, in a very distinctive perspective, which doesn’t always match the reality of the smallholder farmer and his or her realities. And aligning those agendas is something that has been difficult all along.
Dave Ingram
I think it has. It’s not difficult right now; you see huge funds in the world, green funds looking to invest in green development, so-called green development. The difficulty is not raising the money, the difficulty is finding the projects that add value with integrity.
Teymoor Nabili
That is what the financiers always say. But is that necessarily a problem on the side of the farmers? Or is that because the financiers themselves need to readjust what their criteria are for evaluating a potential investment?
Dave Ingram
I think there’s a scientific lock in the middle of this. So the scientific lock is credit management; finance goes to farming through a credit system. Credit systems require integrity, and the integrity in this space is the science of… What does regenerative farming, better sustainable farming bring to actual carbon impact? Now when we get the clarity of that, it will help facilitate financial flow into farming.
Teymoor Nabili
What do you mean by the clarity of that?
Dave Ingram
Well, so if you’re claiming that you’re doing regenerative farming in one crop in one year, and the scientific value of that in terms of carbon management is x, how do we know it’s the same x in the same crop in a different country? Or a different part of the same country? Or is the same carbon impact next year? How do you account for that? It’s a real difficulty.
Teymoor Nabili
Is there a role you can play in that? All these conversations and interactions and engagements that you have with the smallholder farming community, you know what their problems are. And how they need to balance their own practical realities with the more scientific approach that the financiers take, how can you play a middle role in that?
Dave Ingram
I think there is a role for us and other people in terms of, there’s something between the financiers who are raising the funds and the farmers who are developing agricultural systems, with the scientists who link the two together, of what’s the carbon benefit of doing something better in farming? And is it the same one year to the next year? So how do I have an integrity of a system of carbon credits to farming that says, I’ve done regenerative farming in soy, and I’ve intercropped and I’ve irrigated properly in 2022, and I do the same or differently 2023, who’s accounting for that? That says, I’ve got this amount of carbon this year, benefited, What about next year? The science behind that needs to be more consistent, have a higher credibility for the funds to properly flow between the funds that are available and the farmers.
Teymoor Nabili
Once again, we’re sort of getting into this theoretical realm, discussing the broad ideas of what could be done and what should be done and what are the priorities. One of the problems is that we do tend to spend a lot of time discussing things at this level, and not enough time and actually thinking how do we actually make that happen? And how do we make it scale? And how do we do it fast? And this is one of the things that we’re trying to address within this, and I don’t know whether within the context of the stuff that you do, you can see solutions that are not immediately applicable, but certainly things that you can actually do that will generate action as opposed to generate principle.
Dave Ingram
It’s a super point. You know, moving from idea to impact is critical. We’ve got to stop talking about the idea, and the policy, and the theory and the future, into what’s the impact today. We’ve got a beautiful project in coconut sugar. This wonderful product that goes into one of our big brands in Indonesia, it’s called Bango. It’s a table sauce in Indonesia, it sits in almost every consumer’s home in Indonesia. It’s made from coconut sugar. Coconut sugar, to harvest, involves going up a tree twice a day, a farmer climbing up a tree and sequestering the fluid from a coconut, and then cooking that fluid up. And then it being sent through for us for refining and putting into product. Now, youngsters don’t want to be climbing trees. So what we see is fewer and fewer farmers willing to go up these high trees. I tried three years ago before COVID, I think I got two steps up the tree, I thought physically I’m not fit to do this. And it was scary. So we’ve had a five-year development with innovation from farming institutes on dwarf trees. So that rather than being 30-foot tall, they’re 12-foot tall, so that it’s easy to walk up and at hand height level standing on the floor, you can sequester the fluid, and harvest the fluid, and therefore get more people back into that crop because it’s easy to harvest. So youngsters come back into the crop. But that’s a great link, I think of science and agronomy having a real impact on the availability of the product and getting more farming into that product. And therefore he the yield is better as well, by the way. So it’s not just easier to harvest, the yield is better through the dwarf trees. So we’re deploying those in Indonesia, Myanmar, Thailand.
Teymoor Nabili
Through all the activities that you do, some of which you’ve touched upon here, do you have suggestions, advice to other companies, perhaps not as big as Unilever, but other companies, about how they can make a difference in their industries and in bringing together their own communities of farmers and interlinked ecosystem members?
Dave Ingram
There’s a few themes of what I’ve said that companies have got to know their sourcing. That may sound simple. But most companies work through other companies, through traders, and don’t know the farmer, don’t know the actual source. So firstly, you got to know the actual source, and include those farmers in your system, know them, understand them, know the issues they have, and move into training development systems with those those farmers. Target improvement and measure the improvement that you’re aiming for. We set some really hairy goals 12 years ago now in our sustainable living plan that most of us when we first saw them, in some cases, we didn’t even understand the metric. And if we didn’t understand the metric, we thought it was just a crazy number to be aiming for. But actually setting hairy goals makes you look in a different way at a problem. It makes you include other people. And that’s the last piece of advice – there’s lots of people around who want to help, whether it’s NGOs, partners, peer groups, who want to be helping in this. So it’s not something you need to feel you’re doing alone as a company. Join with these groups. Work with peers. We do it and we’re quite a large company. It’s been fundamental to us to be part of these ecosystems to get scale in our change. So for anybody, they should be accessing that. So it’s know your sourcing, include that sourcing, make sure it’s equitable for those people, look at training development, but do that with ecosystems around you.
Teymoor Nabili
David, appreciate your time. Thanks for talking to me.
Dave Ingram
Cheers.
