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Entries in commodities (1)

Tuesday
Nov032015

Sustainability and the art of the deal

For an insightful look at one of the ways in which sustainability is becoming a more tangible factor in business deals, I recommend a recent report in the Financial Times on Mitsubishi's acquisition of a 20% stake in Olam International.

Based in Singapore, Olam is a global integrated supply chain manager, processor and trader of soft commodities that has developed some expertise in sustainable agricultural products. The company fosters the notion of sustainability within its workforce from the very start, sending new employees to remote rural locations to foster a sense of "Olam's place in the community and ecosystem," according to Sunny Verghese, Olam's CEO.

This emphasis on sustainability is producing tangible results that can be measured--among other ways--financially. Mitsubishi's $1.1 billion investment was driven in substantial part by its desire for access to Olam's expertise in sustainable and traceable agricultural products. The FT report indicates that Mitsubishi paid a premium for this, and further, that the deal is evidence that the concept of food production based around caring for the environment, efficient use of non-renewable resources and quality of life for farmers and society — is starting to affect deals further up the agricultural supply chain.

-- Graphics source: Financial Times and the International Institute for Sustainable Development

-- Clara Shen