NYU Stern Center for Sustainable Business and HSBC Bank USA Launch Framework to Drive Investment in the Food and Beverage Sustainability Initiatives, Maximizing Impact and Financial Returns

Estimated results from companies participating in the study - Anheuser-Busch (AB), Hero Group, and Ingredion - included nearly $60 million in net present value (NPV) over 10 years.

HSBC Bank USA, in partnership with NYU Stern Center for Sustainable Business (CSB), today announced the release of the Food and Agriculture Sustainability Strategies Framework. Grounded in the ROSI™ (Return on Sustainability Investment) methodology developed by CSB, the unique framework helps sustainability and financial leaders within food and agriculture companies make the business case for sustainability initiatives that will deliver both financial value and positive societal impact.

The unique ROSI methodology works by improving decision-making, valuation, and internal communications by helping companies go beyond ESG reporting metrics to truly understand where value exists within sustainability strategies and investments.

HSBC funded three key projects with Anheuser-Busch, Hero Group and Ingredion, to inform the food and agriculture framework, in addition to learnings from previously completed ROSI projects with Arca Continental, Cargill, Mars, McCormick, McDonald's, and Natra. The projects highlighted the importance of a thorough analysis of the opportunities and risks associated with implementing sustainability practices across supply chains and company functional areas.

The research identified the following twelve sustainable strategies mapped across the food and agriculture value chain along with practical suggestions for how to calculate the associated returns across the supply chain:

1) Improving water security

2) Ensuring protection of biodiversity and ecosystem conservation

3) Improving nutritional profile of food products

4) Improving soil health

5) Raising and treating animals with respect and care

6) Adopting sustainable packaging solutions

7) Mitigating and adapting to climate change

8) Incorporating circularity into food waste management

9) Investing in employee and supplier well-being

10) Reducing the use of harmful chemicals

11) Implementing sustainable sourcing

12) Investing in sustainable brand marketing and communications.

Initial results from the findings include:

• Anheuser-Busch (AB) found nutrient management best practices for barley improves AB operating efficiency, reduces Scope 3 carbon emissions, and leads to enhanced brand value. ROSI results show benefits amounting to ~$40 million in 10-year NPV and an average annual operating income improvement of ~$7.5 million.

• Hero Group found that promoting sustainable bee-friendly farming practices improves fruit pollination and yields, reduces input costs for growers and leads to carbon sequestration benefits for achieving Scope 3 targets. A 10-year NPV of €3.6 million (before costs) was estimated with an average annual operating income impact of €650K.

• Ingredion USA’s Pakistan affiliate, Rafhan Maize assessed benefits from promoting the use of AflaPak™, an aflatoxin biocontrol product, in its upstream corn supply chain to reduce on-farm waste in corn. Additional benefits were increased sellable yields for growers, lower risk of supply disruption and improved operational efficiency for the company. The results showed the potential for a 9.3x return on investment to develop AflaPak™ and a 10-year NPV ~$15.5 million.

“Our ROSI food and agriculture sustainability monetization framework provides an important strategic decision-making tool that helps food and agriculture companies understand and unlock the benefits of more sustainable practices, such as operational efficiency, customer demand and loyalty and risk mitigation,” said Tensie Whelan, Founding Director, NYU Stern Center for Sustainable Business. “We are grateful to our partners at HSBC for recognizing the untapped opportunities created by investing in sustainability strategies and helping us share these valuable insights.”

“Since partnering with NYU Stern CSB a few years ago, we have seen first-hand the way that the ROSI tool can help drive really meaningful conversations between sustainability, finance, procurement, and even make a strong case in boardrooms,” said Kelly W. Fisher, Head of Corporate Sustainability, HSBC Bank USA. “We hope the expansion of this tool into new sectors will lead to even more investment in initiatives that will impact real change.”

On a recent podcast from global software company Workiva, ESG Talks, Tensie and Kelly discuss the framework in depth and its value to leading companies and share stories from both the food and beverage and apparel sectors.

This marks the second framework created between NYU Stern Center for Sustainable Business and HSBC Bank USA, building upon the Apparel Industry Sustainable Strategies Framework announced in 2020.

For additional information on the Food and Agriculture Sustainability Strategies Framework, please click here.

About HSBC

HSBC USA Inc. ("HUSI") is a Maryland corporation and its principal business is to act as a holding company for its subsidiaries including HSBC Bank USA, N.A. Through HSBC Bank USA, N.A. and its subsidiaries, HUSI offers a full range of traditional banking products and services to individuals, including high net worth individuals, small businesses, corporations, institutions and governments. HSBC USA Inc. is a wholly-owned subsidiary of HSBC North America Holdings Inc.

HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,990bn at 31 March 2023, HSBC is one of the world’s largest banking and financial services organisations.

About NYU Stern Center for Sustainable Business

The NYU Stern Center for Sustainable Business (CSB) was founded on the principle that sustainable business is good business. We provide education, conduct research, and influence industry practice by proving the financial value of sustainability for business management and performance. At CSB, we aim to equip future and current corporate leaders with updated business frameworks that embrace proactive and innovative mainstreaming of sustainability, resulting in competitive advantage and resiliency for their companies as well as a positive impact for society.

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