Sowing Sustainability across the Supply Chain in Commodity Procurement

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Hey, Scott, I think Tony's just gone offline for a second. We're waiting for him to come back. Ok, I'll restart now. Welcome, everyone, to the final discussion panel today.

Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

So, in sustainability across the supply chain, in commercial procurement. Over to you, Eddie, you.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much, Tony, and welcome, welcome, all of you to our panel. I'll ask our panel to introduce themselves first. So, Scott, if you'd be kind enough to introduce yourself to our audience.

Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Certainly.

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

Thanks, Eddie. It's a pleasure to be here. My name is Scott. Welcome. I'm director of grain mist management at the Good Mills group. We're Europe's largest wheat milling company, procuring around 3 million tons of grains operated in seven central European countries.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much, Scott. And Peter, if you could introduce yourself, please.

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Yeah, my name is Peter Livy, I'm managing director of, hmm, Great Britain. And I'm also what's called a global sustainability ambassador. Hmm. Are a container shipping company, about the 8th largest. Yeah, that's me.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. And if I could ask you, Stephen, to introduce yourself, please. Yeah.

Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Hello, everybody, my name is Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources. I am the head of ESG and sustainability at our resources, a swiss based commodity trading company. My main area of application of this subject matter is in the mining and metals part of the world.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. My name is Eddie Toppick. I'm head of technical analysis for ADM Investor Service International Limited, part of Archer Daniels Midland. I'm also chairman of the UK Society of Technical Analysts, which is the oversight body for technical analysis in the UK. And I'm a director of the International Federation of Technical Analysts, which is the United Nations of all the societies around the world. So, thank you everybody. Please welcome our presentation today. Now, we've got some questions we've going to put forward to our panel first, but you are open for any questions out to them and I'll put them to our panelists in due course, whenever breaks happen in between discussions. So I'd like to go to this main topic, which is sowing sustainability across the supply chain in commodity procurement. Such a big thing to look at there. Now, Scott, what do you think? Do you think that customers are not necessarily knowing what they want or willing to pay for that sort of thing, to have that sort of thing? What are your thoughts on that?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

I think our customers, us ingenious human beings, know what we want and that we want to reduce the effects of climate change on the world and hopefully keep the world going in a great way for future generations. I think we kind of know what we want. I think where the lack of information and education comes into is how we get to that, who's going to pay for it and what sacrifices will need to be made along the way, because undoubtedly, as you make changes and you transition from one source of energy to another or one procurement supply chain to another, there comes the difficulties and the challenges with it. And inevitably, at the beginning, there's normally higher costs, and I just wonder whether customers are aware of those costs and really willing to pay for them at this moment in time. So, yeah, I think we know what we want. I think we're just a little bit confused or a lack of real guidance on how we get there and not helped by governments changing their minds or their targets quite often, as we've seen in Europe with these fund protests, and all of a sudden the commission backs down on certain rules and regulations, which doesn't help the long term effectiveness of the programs.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Yeah, I can see exactly where you're talking about that. And you've mentioned about the European Union, about Brussels. There's also the impact of energy and general ignorance in some cases about what's going on. Maybe expecting it to be free. Well, easy and cost free, but not. Do you think expectations are higher than in the past or what do you think about that?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

I think definitely, I think we've become a society that's expected these things to be given to us. I mean, if we take, since COVID and the war, which gave higher food and energy prices, we expected governments to bow us out. In the good old days, if you couldn't afford your heating, you put another jumper on, or if you couldn't afford food, you cut back or made it last a little bit longer. And I think certainly in the western world, we've come a little bit too soft, if I dare say it. And as I say, that's where we need to really realize that this is not going to be easy. There's going to be challenges and sacrifices needed to be made if we really want to reach these ambitious goals that they are. I mean, 2030, 2035 is not a million miles away and we've got a growing population at the same time. So, yeah, it's going to be difficult and it's going to take some sacrifices all the way along the supply chain.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

It's not an easy thing you're saying that people should do, but they have expectations that it should be that, but it's not actually going to go that way, I take it. So, yeah, I see your point on that? If I can move over to you, Peter, in shipping and transportation services, what does it look like for, say, carbon accounting? Again, people expect things to be free of charge. How do the companies involved in that, how do they get repaid for that investment that they're making?

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Yeah, that's a really good question, because at the moment, we predominantly don't get repaid, but we are trying to create the means by which our investments can get some extra sort of returns to us. Many things in the transition are under development at the moment. One of the biggest changes with regards, for instance, to fuel was the new ISO standard established back in March last year, ISO 14,083, which for the maritime part, uses the clean cargo methodology for working out various emissions. And that's been used since about 2009, 2010 by container shipping companies. Especially because our customers are businesses rather than individuals. For the very large companies who may have pressure from their investors or their customers, they may end up being much more dynamic and be willing to pay something. But that probably only represents about 10% of our customers. But to be able to prove that we are working with lower emissions, new carbon accounting methods have had to be set, and I suppose the next biggest one that's currently under development, something called book and claim, which is related to carbon infetting. So it's the emissions we physically make compared and business as usual, versus what we are doing to reduce carbon emissions. At the moment, that might be using biofuels or lng, which is less than business as usual. In the future, it might be using methanol or ammonia or something that could be a zero carbon fuel, along with things like onboard carbon capture. But that all costs money. The fuel costs money. So you have to have some sort of method of carbon accounting that can be trusted by your customer who might want to pay the gap between business as usual and the reduced carbon emissions. And as time goes on, these alternative fuels become the more normal fuel. But in the transition, that is the hazardous part, because we have had to invest in new ships. And we need to signal right across other industries about making fuels that are alternative fuels. And of course, there is no silver bullet at the moment. There are various solutions.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

I can see that. There's no one route to that success, is there? There's a number of them, yeah, absolutely. Okay. And Stephen, I go on to you about mining and metals. Now, in the last 1015 years, mining companies have tried to become more responsible. Can you talk a little about finance, especially in relation to ESG and who the biggest stickler for the use of metals is in respect of the ESG agenda. So what are your thoughts on that?

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Okay, for this subject, we can split it into two, right? We have the mines, which predominantly are located in developing countries, and then we have the transformation business industries, which are smelters and things like that, which can be, let's say, European, for example. So most of the requirements regarding ESG from certain stakeholders for mines is definitely predominantly around human rights, the social aspect of ESG. And I think rightly so, having lived and breathed out there on the mines in Africa, for example, on the other side of the coin, the sticklers customers, let's say, for example, take an example, steel making customer, right? Stainless steel, who might want to procure ferro nickel, which is an ingredient to making stainless steel. They'll be real sticklers. More on, obviously, the decarbonization of the product, that's for sure. Today, they know which company they're dealing with. They know that mining is responsible mining. So they go through that process to get an idea of the whole value chain and how it's managed. But decarbonization of stainless steel, for example, is their number one agenda. Filling onto the automotive industry, making evs. It's got to be as environmentally friendly as possible. So that's a big issue for us.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

And the financing, do you think, how easy is it to get financing for some of the projects these days?

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

It's pretty tough. I don't think we're there yet. In the metals, there is talk about paying more for less carbon intensive products, that type of thing, but we're not there yet. They are writing carbon intensities into products contractually these days. So we will buy your product, but it has to be no. The carbon embedded carbon can be no more than x tons of co2, x. And in five years time, if we're still doing business together, it has to be 20% lower than today. But the financing, financing initiatives, tax reliefs, or customers paying more, we're not there yet.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Do you think that's going to happen?

Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Not sure. It depends how things pan out with China at the moment. Indonesia with a lot of metals, they're producing higher carbon, lower costs, flooding the market, lowering the price of these commodities. Having said that, I do have a few Chinese customers who are asking me about our ESG performance. Now, these are large, multinational Chinese companies, so let's see how they influence that part of the world going forward.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Indeed. Okay, thank you very much for that quick briefing on the whole subject. Now we have a polling question which I'd like to put forward to our audience. So, audience, if you could have a look at the polling question, which we would have up in a few moments. Also, please bear in mind we have the Q a button, which is on the bottom of your screen, which will put any questions to the panel, and I'll be able to formulate those and put them on your behalf. Can we have the polling question, if that's possible. There we go. And this is speaking to each of you individually. Where does my sustainability responsibility begin and end? Is it the commodity's origin? Is it within my own company? Is it with my customers? Or is it across the whole supply chain? So the commodity's origin within my own company, with my customers, and across the whole supply chain. We'll leave that up for a few moments, and I'll deal very quickly with something else that I wanted to bring up. And Scott, if I could talk to you about this. There seems to be a lot of bureaucracy. I mean, there's always bureaucracy, but there seems to be a lot more bureaucracy. I was wondering, in specific to the EU, et cetera, whether AI was coming into that space and who is responsible for that bureaucracy for form filling, et cetera. Should it be you or should it be your customer, or should it be a partnership between the two of you? What are your thoughts on that?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

I think ideally it should be a partnership, because in general, that's the way life works in partnership, not just one person making decisions for everybody else, and everybody else has to stand by it. I think the practicalities don't quite work that way. I mean, if we take ourselves as a processor, then first and foremost we look at what we can control ourselves, which is obviously efficiency and waste management in our facilities. And honestly, with the margins that we have in our business, we've been doing that for many years. And I think a lot of people blame the big energy companies, the bps and the bad guys, but they've been talking about ESG for probably 20 years plus. So this is not new for these companies. This is not new for us. If we talk about the scope free, then it becomes a little bit more difficult because there's a lack of margin. We got record, not record, but we've got the lowest grain prices in the last five years. And so farmers in Europe are struggling big time. They're facing a big competition from imports that don't have the same rules and regulations that we face in Europe. So whilst some of the protests are maybe a little bit far fetched, they do have a genuine point. They're not really seeing any value in doing what the governments are putting upon them. And I think to a certain extent, there wasn't any discussion with them, for example, the diesel tax in Germany that the government overnight just took off and said, you need to use electric vehicles. Well, I don't know many electric tractors within Europe, so what's a farmer supposed to do? So I think there needs to be a bit more communication, more collaborationism between countries in Europe and Brussels. And at the same time, we do need the higher prices to allow companies the margin to invest in these changes and this technology. And with that, AI will come into it because it will create and help with your efficiencies and operations. But again, it comes back to the cost factor. There's nothing for free in life. Somehow, if we all want to work with a full supply chain that's sustainable, everybody has to pull their weight and play their part in each part of that chain.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. Thank you very much for that. Now, can we drop the poll and we'll have the results in a few moments? But whilst we're doing that and we're waiting for that to happen, I'd like to speak to you. Oh, we have the results already. Now, that's very interesting, because if you look at the vast majorities across the whole supply chain, it seems that we've had our audience built in already. Now, the whole ESG and sustainability and even regeneration, which I'll go on to in a little while, across the whole supply chain, by a large majority of 60% across the whole supply chain. And then the two others are within my own company and with my customers, and nobody actually considers the commodity's origin on its own. So I'd say some are looking just at their own companies, some are looking at their customers, but the vast majority are looking across the whole supply chain. Scott, your immediate thoughts on that? What do you think about the answers to that poll?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

In all honesty, I think that shows a real lack of knowledge, because if I just take the UK biofuels industry, if we want to say the whole supply chain, why are these companies importing corn from South America when we have corn in Europe, when we have wheat in the UK? I mean, if we really want to worry about the whole supply chain, that makes no sense. If you talk about energy, we think we sold our energy issues in Europe, but instead of taking lng or gas from Russia, we're taking gas from the US, we're shipping our vessels across to Europe and then using that gas and thinking that's solving our sustainability issue. So I think there's a little bit of naivety in it. Yeah, I'm surprised that people feel that's what it should be.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. And Peter, can I ask what your thoughts are immediately on that?

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Yeah, I think there needs to be an awareness about everything across the supply chain, but obviously there are direct accountabilities, direct responsibilities, and then it becomes secondary and tertiary. So shipping wise, we have to know how safe in future an alternative fuel is made. We have to know how much carbon we're going to be using to build a ship. But we're directly responsible for some aspects and it's more indirect with other aspects. So, yeah, a little bit more nuanced than having full accountability somehow for everything.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Indeed. And can I ask you, Stephen, what your thoughts are on this.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Yeah, well, look, what we said earlier about the origins of things and where we get stuff from. We've all heard of french onions though. I live in France. I was in the supermarket the other day. The onions came from New Zealand. It was ridiculous. Right. However, I think all known sectors are different and they have their own characteristics. Mining and metals being a commodity trading house, we don't own assets, so we're sort of like the middlemen. Right. So my customers, who are Scandinavian, need us to walk the talk with regards to ESG. So we have to feed it down to the basics, the origins, like ores, mines, to bring them on board. What is ESG? How it's all put together vertically. Right. So for me, the 60%, I'm well in the middle of that. But as both of my colleagues said, there's a bit of strangeness going on which needs to be ironed out over time.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. Thank you very much for that. Okay, now, Peter, can I go to you talking again about too much to deal with? There's often the phrase from the well to the know. From looking at the origin for energy, for shipping, one way or another, do you have to do everything or don't you have to do everything? But do you have to be aware of the consequences of what you do? What are your thoughts on that?

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

I think we have to be aware, but for certain things, we have to be not only aware, but making sure something actually happens. So with regard to fuel, we would have to make sure across industries that if we say that we are buying a new biofuel that might reduce our carbon emissions by 30%, we have to prove that we bought it. We have to know that the person we're buying it from created that fuel. And it is a genuine biofuel that was created in a particular way that doesn't involve all sorts of other aspects and emissions that might not make it green. So maybe a better illustration. If it was a zero emission fuel, we'd have to be aware that that fuel was created without expending any energy. And there's no carbon involved in the creation as well. So we need a sort of blockchain of responsibility.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Yeah, no blue, green. It can be green, but it may not necessarily be blue or gray, and definitely not. Okay, I appreciate the points you're saying on that. And can I move over to you, Stephen, and that's talk about the supply chain from the mine, through the orbian truck, through the ships, through to the custody. At the end of mean, would you physically visit smelters? And do you follow through with the walk, the talk, and not just talk the walk, or whatever it is. What are your thoughts on that?

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Well, look, I guess I'm in a lucky position where we have 100% off agreements with a sort of vertically integrated metal chain, if you like. Right. And because it was 100% offtake, that means that I have my say in what needs to be done with regards to ESG or how are they tracking, helping them, collaborating. And as Scott said, partnering is very important. Right. So yes, I do make it a point to actually physically go to our principal suppliers, industrial facilities, whether it be mines on the other side of the Atlantic or in Africa, or smelters in Europe, which we deal with. I go there, sit down with their HSE guys and with the GMs, and we get to know environmental compliance, okay. Operating permit, okay. Health and safety, okay. That's all well and good, but that is not just what ESG is involving today. Right. So it's bringing them up to that level of what our customer, stakeholders, banks, investors mean. What do they want from me? What do they want to see in ESG? So I have to go and physically help them and collaborate on those issues.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Yeah, we spoke before we actually went on air, was that there's plenty of people talking about the e and the s, but not so much on the g. No, absolutely.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

The g is the hardest one. The g is like, yeah, what is the g? Because we've got the KPIs, we've got this. But how do we manage the G? I mean, for me, the G today, the EU legislation is coming out, right. With regards to disclosures, obligatory disclosures, whether it be voluntary, which I think my advice is, yes, do them voluntarily, if it's not already obligatory. And within that disclosure process, everything you should be reporting on and gathering information. Data is in there, so it's like a recipe book to help you along with your supply chain of what information you need to gather and to report on.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much indeed. Dear audience, please put your questions through on the Q A button which is on the bottom of your screen. I'll happily put those questions to our panelists. Whilst we're carrying on from talking about this, I'd like to bring up the subject of traceability now. Stephen. Sorry, Peter, you mentioned measuring emissions from 2010, the global standard on emission, the ISO 1483 for clean cargo. Can you explain a little bit about that in relation to traceability?

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Okay, well, thinking of things as they are now developing, so, traceability, what it's going to look like is having a means of carbon accounting that is certified right from the point of origin. So if I was going to be using ammonia as the fuel after it's safe and the legislation comes out and all that sort of stuff, because it might be zero emissions, we would have to be able to find a way of proving and having some certification that how that ammonia was created. Was it created from electrolysis and all that sort of thing, then we would have that sort of chain of accountability which our customers could see if they decided that they would be using us in the transition for getting some carbon token, say, for having reduced our scope, one, emissions, which is their scope, three, emissions, they would have some certainty that what we are doing and saying is true and trustworthy. So that's how the accountability chain is developing as far as the transition is going and going forward. And of course, once all of these alternative fuels become the standard, that's a different scenario. But the most difficult and awkward part is now when you need to trust or have some certainty in what's being said or sold to you.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much indeed. Ok. And Scott, now, traceability, for a while it was GMO and non GMA and grain certification, but do we have a standard now that we can look at and say, ok, this is what it is?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

As far as we're not, from a sustainability point of view, no. And there's a few companies offering their own ones, but they seem to be more regionalized or even country specific rather than worldwide. So I think at the moment, no, I think we have been used to it, as you said, traceability on the GM side of it. So farmers and procurers are used to dealing with it. And there's plenty of multinational superintendent companies out there that have the ability to provide it. But I think at the moment, we don't. And I think, as we discussed off air the other day, you look at this situation with the cocoa prices and european defolitization, people almost forgetting about it or not prepared for it. And we're not talking about multinational companies down there, we're talking about local farmers all of a sudden being forced to give all this information, as Stephen's mentioned, that they've never had to do in the past, and they don't have the wherewithal to do it. And we see what happens with the prices of cocoa, and now we can maybe get away with it with palm oil, because there's other vegetables that we can use. But I'd be interested to see whether the world's ready to give up on its chocolate habit and is willing to pay and help these farmers meet the requirements that Europe has almost forced upon itself.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Yeah, I think one of the things about that is because if you look at grains and oil, seeds and cattle, all of those are big plantations, sugar big plantations, big farms. Whereas for cocoa, it's literally family farms in parts of Africa where there isn't necessarily that much education or documentation to be able to be completed. And that's been the issue with that. And I think also this has all come about as usual, everybody's looking at it way too late, because it came into effect in June last year, and properly will come into effect for large companies at the end of this year. Going on from there, it's the ethical side of it. And Stephen, I'd like to look at the ethical side that you see and how it varies from country to country. And it does vary from country to country. What your thoughts are on that and how you can weigh up human rights to the environment. Big question.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

It varies from country to country with regards to the rule of law, right. How governments apply their own laws to the legislation or regulations they have for environmental and social management. For example, let's take west african countries, for example, which historically are connected to France. Ex colonies adopted a lot of french legislation for managing those types of subjects. And today's sort know is also similar to some parts of the EU legislation, because France is part of the EU. Right. However, you take other countries, South American, let's look at Bolivia, Peru, for example. DRC is an easy one. Everybody knows about that. Completely different ballpark. Government incentives. Governments, they are shareholders in the mining operation from the outset. Depends on the value of the metal that they're having. So therefore, it's happy days, lots of money involved. Therefore, compromises are made with regards to, let's say, community issues, or we don't have to build this road, blah, blah, blah, because it's going to cost us $11 million and the government will say, yeah, all right then. But you need to show that you're being proactive, doing something else. So there's all this dealings going on which is completely outside of ethics, what should be done? Because the standards are there. OECD, United Nations, IFC, ICMM, they're all there. How to do things properly. Right. So it varies from region to region around the world, which is a big challenge because you have to. For areas where you think I'm going to put in higher levels, because the national levels are not high enough, that the bar is not high enough for me to meet my requirements for my stakeholders. That can be a challenge sometimes, that's for sure.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Indeed. I mean, how many nickel mines does the world need going to three to.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

400 to meet the goals of the Paris agreement. No, sorry, that's total mines of all metals together. Three to 400. But still, it's huge.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

They're going to be in these places that you've mentioned in Africa and South America.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Correct. And also, we're looking at Europe. We're looking at our own doorstep. Right. EU critical Minerals act. We're looking at lithium in Portugal. We're looking at opening up in Finland, Sweden, again, where there's indigenous species up that way. I know there's gold in Scotland and in Northern Ireland, but that's never going to be developed. The pressure is going to be too much. Right. Tin still in Cornwall? Yeah. South Crofty.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Okay, thank you very much for that. Peter, I'd like to speak to you, and again, speaking about the ethical side, during COVID one of the issues that came up was safe areas for ships crews and the thoughts behind that. Plus, also, you've mentioned that we're moving away from traditional energy ships towards the new energy ones, ones that are much more in tune with our environment going forward. What are your thoughts about the ethical, looking after that side of it from an ethical point of view? The ships cruise and then also where all those ships are going to end up.

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Yeah, that's an important point. Briefly, during COVID we were really not impressed by the international community not allowing our seafarers to get off a ship. Whose responsibility is that when you've got seafarers on board? We need to change crews. People make their living from going to sea. The crews that are replacement crews can no longer work and bring in an income. And we had certain seafarers that it took us a huge amount of time to be able to get them off. Often the port wouldn't allow them to get off or the destination country wouldn't allow them in their country. So yeah, there was a huge amount of lobbying going on in all sorts of places during COVID So being a peculiarly international business, that is a big issue. But shipbreaking is a huge issue, the end of life. So during a ship's life, you can be looking at ballast water and plastics. How is that used on board? But a big ethical issue is how do you transform dirty and dangerous ship breaking activities and make sure that somebody's not going to buy a hull from you to take a ship and put it on a beach somewhere in Bangladesh. That is a couple of days' journal away from the nearest hospital when they start dismantling that thing, not knowing what's in it, how it was built, what hazards and materials are present. So, yeah, beyond compliance with international regulations, owners of ships have to make sure that they sell only to yards that invest in safety and environmental strategies and standards of their own. And it means the traceability thing comes in again. You have to know how your ship was built. It has to be built in such a way as it can be disposed of in a safe way as well. It's knowing where all the hazardous bits and pieces are and making sure that any hazardous waste is disposed of in a responsible way. So until about 1020 years ago, you'd be offered a few million more to have something disposed of. If you never thought about how something was disposed of and you just went for who's paying you the most, it would end up on a beach in Bangladesh because of the labor cost. But for somewhere responsible for it to be disposed of, that's much more costly. But that is where we've gone to now.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much indeed, and very valid points you've raised, Scott. I don't imagine in your particular area, there's many sort of ethical issues directly in the farmers that you deal with in Europe. But I was thinking more along the lines of Eudr and deforestation and more also, which I know is a big thing in agriculture now, is regeneration. Would you like to expand on that perhaps a little bit? Yeah, sure.

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

I think in all honesty, the regeneration of the farming side of the grains business is probably the best and the easiest way that we can contribute to improving the sustainability of the commodities market. And I think farmers more importantly will see the benefits to them. There's a deadly cost to start with in lower yields and unique green fertilizer that's at a premium at the moment, but the benefits are long term. And I think that's something we need to change. We need to think long term rather than short term. But, yeah, basically, regenerative farming, it goes back to almost an old way of farming. You're strengthening the root system, which basically the roots act as a sponge. So when we get rain, the rain soaks into the ground, providing necessary moisture for the crop, so they don't need to be irrigated as much. Also, the nutrients are kept within the ground and in the plants. And so ultimately, you will get a more consistent and resilient crop. Not necessarily improved yields, but you'll get a more resilient crop, as we see in the US with their corn in what was, for many people in June, July 1 of the hottest summers on record, by the time of the harvest cake, they had record yields. And I think that's what we need to do if we want to produce the food for the extra billion or so people are going to have in the next 15 to 20 years. But using less land and using less fertilizer and pesticides is the only way. So I think regenerative farming is the way forward. And I think, at the same time, we have to be prepared to pay that to give the companies the profits for them to reinvest in creating new ways and improved technologies in this sector. It comes as a combined package.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

I think that's very valid. I know from my side, regeneration is one of the things that's been mentioned again and again and again. Okay, we're coming towards the end of our session, I wanted to actually run one quick point before we come up to the seven word or less phrase or sentence. It's this. If there was one thing that you would wish for in an immediate future, not immediate, let's say a year or two years time, that really you would like to see happen to improve sustainability in a supply chain and in commodity procurement, what sort of thing would that be now? Scott, can I go to you first? And what would be the one thing you'd really like to see happen to improve sustainability in the supply chain?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

Question. I don't know, but I think I just saw a web comment there by Nikhil about the ethical side of it. I think of us as consumers, we're all consumers. At the end of the day, we also have to look at ourselves. I mean, do I need to be buying fizzy sparkling water? We know the energy needed to make the bubbles in fizzy water. What's the matter with your regular tap water or still water? Do my friends need to sit there and say, I'm healthy because I'm eating an avocado which has been shipped all the way from South America and I can get it twelve months of the year. So I think to start with, we need to look at ourselves, how we can improve or we can change the supply chain and also not gripe when prices go up, because that's the fact of life. Not everything is for free. So I think that's how I think I would look at myself. First what you can do yourself, and then hopefully everybody else will sort of follow suit and we work together. But, yeah, I think it's easy to say businesses should do this and the other, but what about us as individuals?

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. And Peter, in a few words, what's one thing you'd like to see to improve sustainability in the supply chain, multi supply chain?

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

What would be fantastic would be to have some common international rules and regulations.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

No, they're never going to happen. Is.

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

It.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

There you have it. Okay.

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

What do you wish for? Not what's impossible.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Well, yeah, but if you are careful what you wish for, you might get the UN involved in this. And I know the response from that, from Stephen on that already. So common rules and regulations across international boundaries. And, Stephen, your thoughts on that? In a short phrase, what sort of thing can you really like to see if there was just one?

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

I mean, again, for my response is wishful thinking. Genie in a lamp. I rub it three times and he says, what do you wish for? If I go to conferences in London or Amsterdam or in Germany or whatever, regarding ESG subjects, some of them are quite highly technical, really good presentations. What I would like to see is more representatives from government bodies participating in these discussions, just so as they understand the complexity of what the private sector is up against today.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Oh, please be careful what you wish for. That's all I'm saying. So we want more fun and we want more governments to understand what the hell they're doing.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Correct. Just to understand what they are doing.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Okay, fair enough. Gentlemen, it's been brilliant moderating you. You've been absolute stars. Thank you very much for that. Now, as I said earlier on, and dear audience, this is for you, there are seven words or less, phrase or sentence that you can leave with our audience as a single takeaway if there's nothing else in there. So, Scott, can I start with you?

Scott Wellcome, Director, Grains Risk Management at Goodmills Group

Yes. Hopefully it's one of my better ones, as I've had 24 hours to prepare. But I have to balance productivity with environmental responsibility.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

That sounds actually quite good. I like that one. Balancing productivity with environmental responsibility. Thank you very much. And Peter, can I go to you for your seven words or less? And remember it's seven words or less.

Peter Livey, Managing Director (Great Britain) / Global Sustainability Ambassador at HMM (Europe) Ltd

Right. Well, I've managed to drop a word. Most important, zero emission fuel is collaboration.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much. And that's again a follow on from what you were saying about international cooperation there as well. Thank you very much. And finally, Stephen, can I go to you and what would you have as a seven word phrase or sentence that we've.

 Stephen Thomas, Group ESG & Sustainability Manager at ArrowResources

Yeah, well, dealing in Como like Scott, communicate, collaborate, partner for mutual sustainable benefit.

Eddie Tofpik, Head of Technical Analysis at ADM Investor Services International Ltd

Thank you very much indeed. I really appreciate that. I think that's what we've been doing here. We've all been working together for our mutual benefit. Thank you very much indeed. And dear audience, please thank you for listening to all our sessions today. Commodities people will be doing more of these as part of commodities trading Week online. Please look out for them. And I'd like to wish you all thank you very much for our audience. And thank you very much to you, our panelists. And bye bye for now. Bye.