Hung Up on ESG And Your Value Proposition: You Don't Have To Be A Leader, Be A Fast Follower

It’s a big idea with far-reaching implications for ag retail—the environmental, social and governance (ESG) framework.
It’s a big idea with far-reaching implications for ag retail—the environmental, social and governance (ESG) framework.
(Farm Journal)

It’s a big idea with far-reaching implications for ag retail—the environmental, social and governance (ESG) framework. Brad Oelmann, president at Farrell Growth Group, says he is encouraging ag retail leaders to break down what each of the components means to their businesses, employees and communities. 

“You don’t have to be a leader. But you should be a fast follower,” Oelmann says. “The horse has left the barn.”

Although it’s natural for people to react to such a large concept with nervousness, Oelmann shares it’s helpful to hear all sides of an equation and triangulate it. 

“It’s not another thing on your to-do list,” he explains. “Rather, prioritize where these three things are in relation to everything else you’re doing. If you can tie those actions into your value proposition, that makes it even a bit easier.” 

He says everyone can then articulate what they are doing in terms of addressing the ESG principles and where there are gaps. 


“As input prices show volatility, there continue to be challenges in recruiting, development and retention in labor, and there’s a larger spotlight for stewardship in your community, these ideas show very important applications for your business,” Brad Oelmann says. 


Environment

“If you have trouble recruiting people, some people really care about the environment,” Oelmann says. “The work ag retailers do can help people demonstrate how they are being better stewards of the Earth.” 

With investments in precision ag, safety and product stewardship, ag retailers are spending time and money in their environmental aspects. 

“This is applying a focus that you are taking actions today with the future in mind,” Oelmann says. 

He references in the broader sustainability piece, we’re in the infancy stage of this era. As a part of this area, Oelmann references carbon programs. 

“It’s completely fair to tell customers if they come in and ask about carbon programs that you haven’t fully vetted all of them, but you know there’s a play, and you want to work with them to figure out the direction for them,” he says. “We’re really in the first inning of the ballgame here.”

Social

To apply this point of the ESG triangle, Oelmann asks, “What kind of employer are you?”

He adds diversity is important in general. It’s important to a business’ employees, and it is important to customers. 
“If you don’t have the right people, you won’t deliver on your value proposition,” he says.

Governance

The first task at hand is operating a viable business. With the dynamics of ag retail, Oelmann applies risk management as a strong example of excellence in governance. Recalling the 2008/09 drops in the fertilizer and crop chemical markets, he shares that was a catalyst for many to adopt a risk management plan. Such plans stated so much product had to be sold before more could be bought.

“Real businesses are run with good risk management. When you practice risk management, it doesn’t mean you’ll be around forever, but it does explain why your business is still around,” he says. “It’s a value to employees, customers and stakeholders to operate in a way where you aren’t flying by the seat of your pants.” 

 

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