The principles of environmental, social, and governance investing can benefit almost any business venture. Being conscientious regarding your impact on the environment is more than a socially responsible investment choice. It is also cost-effective and will improve the bottom line of the endeavor, yielding a higher return on the investment in the long run. ESG in agriculture is no exception.
Challenges of ESG in Agriculture
Farming presents unique challenges for conscientious investment and ESG practices. Traditional commercial food systems have evolved to produce maximum output from a minimal amount of space and expense. These standard practices are not always environmentally or socially responsible, however.
Dairy, eggs, and meat require the housing and feeding of livestock as well as storing machinery, grains, and other feed. These operations use expansive buildings, even when very efficiently designed.
Agricultural Buildings Are Expensive To Keep Cool
Large metal buildings are ubiquitous in agriculture. These structures are relatively inexpensive to erect and can serve a multitude of purposes.
When considering the environment, these agricultural buildings fall short. They require industrial fans and constant cleaning and maintenance to stay cool and comfortable enough for daily operations, particularly if they are housing animals.
ESG in Agriculture Improves Conditions for Livestock
Excessive heat can build up under a metal roof very quickly on a warm sunny day. While it may remain comfortable enough outside, temperatures inside can have a severe impact on livestock.
Heat stress in cattle can cause respiratory problems, reduced fertility, and compromised immune systems, among other issues. Poultry will often die from heat stress. When animals are comfortable, they remain healthy and capable of growing and producing at optimal rates.
Metal Siding and Roofs Don’t Insulate
While the exterior metal of the buildings is generally painted white to reflect heat, the structures still need mechanical ventilation to keep the air inside breathable. Metal by itself can protect animals and machinery from rain and direct sun, but it is not particularly effective at insulating.
Painted surfaces become coated with grime on a farm, vastly reducing any reflective properties of the paint. These buildings require regular washing, which wastes resources and wears out the paint quickly. A painted finish is better than bare metal but less than ideal in the dusty conditions of a working farm.
Solutions for ESG in Agriculture
Running fans is one way to reduce heat in a metal building, but it’s not an ideal ESG farming practice to use more electricity than necessary. By improving the materials used to insulate the structures, you can help regulate the temperatures in these agricultural buildings and significantly reduce reliance on fans and electricity.
New Building Materials and Treatments
With innovative coatings, reflective properties can be preserved without the need for the constant maintenance that painted surfaces require. Sealing and coating the buildings with materials more durable than paint will also provide longevity of the surface, improving sustainability.
Insulating against the heat of the day improves the ambient temperature in your agricultural buildings. This ensures the comfort of your livestock and reduces your dependence on fans and the electricity required to run them.
Renewables as an Integral Part of ESG in Agriculture
Solar, of course, can produce the energy needed to run fans when necessary. Running fans less often and using a renewable energy source greatly improves your operating costs while keeping animals and feed cool and dry. Lower production costs and healthy animals greatly improve your bottom line.
The most effective projects achieve ESG goals by combining the right building materials with renewable energy sources and socially responsible governance of the operation. Coordinating these ingredients will help you maximize the value of your CapEx, lower your overall costs, and increase your long-term ROI.
With improved insulation and heat reflection, you can reduce the need for electricity, often by 25% or more. By incorporating solar panels to produce the power you still need, you can make your operation net zero. This creates a very attractive project for ESG investors.
An Actionable Plan for ESG in Agriculture
Whether you are constructing new agricultural buildings or retrofitting existing structures, the key to success is the right plan. Consult with experts who understand how to combine renewable energy sources such as solar with emerging technologies to maximize your long-term returns.
At ESG Property Consultants, we will help you create the right strategy for your project. We start with an evaluation of your current ESG score and work with you to develop a realistic and actionable plan to reach your ESG goals. Get in touch with us today and let’s talk about ESG in agriculture and how you can achieve optimal returns on your socially responsible investment dollars.