FNEI Insights with Jeff Lakner: ESG at the Farm Level

When did environmental, social, and governance issues first appear on your radar?

There was no magic solution to reach a realization with these issues. Living in a fairly isolated part of the world, the culture of a rural area like this just creates a sense of community. So to look at societal issues…It’s how we were raised. When the umbrella term of ESG came out, a lot of farmers and ranchers looked at the concept and said, “Okay, we get it, because we have to do that stuff every day.” However, there’s a problem, because the ESG messaging often isn’t there from those agriculture groups. We don’t tell our ESG story well enough. As producers, we don’t interact with nonfarm groups enough.

Do you think companies are interested in engaging farmers to apply ESG principles?

In the last four or five years, it’s been astounding how many calls I’ve received out on our farm and ranch here in South Dakota, with major corporations saying, “We’re trying to address sustainability and ESG issues; we’re trying to learn more about alternative energy,” whether it’s wind or solar, biofuels, and what have you. And they say, “We’ve never spoken to a farmer before.” And I tell them, “I’m so glad you called. Let’s chat.” We’ve seen a real outpouring of interest among different corporations in applying food and ag values to ESG.

How might big companies and farmers work together more effectively on ESG?

Many of us in agriculture look directly into the same issues that a major corporation is looking at. It’s just a question of how those [ESG] strategies would be formed and executed on. I deal with empirical data all the time, in terms of what we’re doing for the environment, measuring soil health, and things like that. But there’s also a soft factor that comes into play, the culture of the company, DEI [diversity, equity, inclusion] issues, their governance system, how they treat their stakeholders. So to work better together, we need more collaboration. We need to have those conversations with a wide constituency and they try to pull it together. 

With ESG, people talk a lot about the “E” and the “G,” but they sometimes forget about the “S,” that social-equity piece. Have you noticed that omission in your own experience?

Absolutely. And here’s an encouraging story: I’ve spent my whole life immersed in the economics of the farm sector, interacting with major companies. This past fall, I was an unsuccessful candidate for the Minneapolis Federal Reserve Board of Directors. The position was ultimately awarded to a young person who works with the Cheyenne River Indian tribe. I’ve met her before — a delightful young lady, very talented. After my initial disappointment at not joining the Board, I thought to myself, “The Fed is all about trying to advance inclusion and equity issues, so they really have to walk the walk, too. This person is going to do a great job, because she brings a different perspective.”

You previously mentioned the importance of greater collaboration between farmers and other stakeholders. Can you share any personal examples of such collaboration?

I was contacted several years ago by the Nature Conservancy, and about a year after that, by the Environmental Defense Fund. In the past, those two groups have been neutral to farmers and the production of food, at best, and hostile, at worst. But they reached out to me and others and said, “We need to take an entirely different look at how we engage with our stakeholders…We now know that we have to reach down to the farm level, to people who deal with climate change every day, who deal with potential supply-chain disruptions, to people who every day of their lives deal with risk-management issues.” As a farmer, I never thought I’d be having that dialogue with those two groups and others, but the world is changing. And I’ve had a terrific relationship with those groups ever since.