Everything You Need to Know About Climate Smart Commodities

Recent years have seen increasing acknowledgment of the importance of sustainable methods to mitigate the consequences of climate change.

Climate smart commodities have, as a result, gained traction. This blog post goes over what they are and how elements of their production foster sustainable and resilient systems.

Need to climate-proof your business? We’ll also go over how Silo Capital can benefit you by allowing you to get a better handle and manage your cash flow. This will ensure you’re better prepared to handle changing circumstances, whether that be creating better stability or executing on growth opportunities.

What are climate smart commodities?

Climate smart commodities are goods produced in an environmentally-responsible and sustainable manner.

The production methods of these commodities are intended to reduce greenhouse gas emissions, increase carbon sequestration, and improve resource efficiency. The overall objective is to ensure that production adapts to climate change difficulties and mitigates risk by decreasing impact.

The benefits of climate smart commodities

Adopting climate smart agriculture practices to produce commodities helps businesses, the environment, and society as a whole. Along with mitigating climate change, the primary benefits of employing these methods are the following.

Increased resilience

Climate smart strategies boost the resilience of systems, making them better equipped to deal with climate-related difficulties like droughts, floods, and severe weather events. Businesses are better positioned to adapt to and survive the effects of climate change by employing strategies that promote sustainability.

Better productivity

Businesses that use climate smart strategies can more effectively make the most of their available resources and increase production rates as a result. Businesses can, for example, optimize output while reducing inputs, leading to increased efficiency and profitability.

Biodiversity and soil health

Climate smart techniques employed during the growing stage of the supply chain can enhance healthy soil ecosystems and aid in biodiversity conservation. These sustainable practices conserve precious natural resources and contribute to a system’s long-term viability.

Common climate smart agriculture practices

While climate smart production methods are used all throughout the supply chain, a variety of approaches are used by grower-shippers to lower carbon emissions and enhance resilience. Here are a few common practices.

Conservation agriculture

Conservation agriculture centers on the avoidance of soil disturbance, the maintaining of permanent soil cover, and the use of crop rotation to foster diversity. Conservation agriculture helps with carbon sequestration and climate change mitigation by minimizing soil erosion and enhancing soil health.

Precision growing

Precision growing optimizes the use of inputs like water, fertilizer, and pesticides by using modern technologies like GPS, remote sensing, and data analytics. Precision growing decreases waste, reduces environmental impact, and boosts efficiency by accurately directing resources where they’re required.

Agroforestry

Agroforestry involves the cultivation of trees in conjunction with crops and livestock. Trees offer shade, control water flow, and sequester carbon. This approach helps to mitigate climate change by increasing carbon storage and encouraging biodiversity.

Crop diversification

Crop diversification is the practice of planting a range of different crops to reduce the risks connected to climate change, pests, and diseases. Systems that are diverse are more adaptable and respond better to changing climatic circumstances.

Making use of climate smart technology and resources

To make use of climate smart practices, technology and proper resource use are essential. Here are a few significant examples of those employed in climate smart production.

Precision irrigation systems

For grower-shippers, precision irrigation systems can be immensely beneficial. It uses sensors and automation to administer appropriate quantities of water to crops at just the right time. This technology improves the efficiency of water usage, reducing water waste to save on valuable resources.

Sustainable energy

During production and transportation, the use of renewable energy sources (such as solar power and wind energy) in core operations lowers dependency on fossil fuels, reducing greenhouse gas emissions while promoting sustainability.

Data analytics and remote sensing

When paired with data analytics, remote sensing technologies give significant insights on inventory health. Businesses can use this information to make smarter decisions and improve resource allocation.

The role of smart agriculture projects

Funded by government efforts and partnerships, smart agriculture projects are critical to furthering the adoption of climate smart practices.

These programs provide aid to businesses through technical and financial assistance, encouraging information exchange regarding the development of sustainable systems. By investing in research, training, and infrastructure, these projects enable the production of climate smart commodities.

Several governments and organizations have already adopted climate-conscious commodities to promote sustainable and resilient food systems. 

The California Department of Agriculture (CDFA), for example, has produced a policy agenda promoting climate-smart, resilient, and regenerative systems. Businesses in California have, as a result, begun incorporating climate smart practices into their organizations, allowing them to steadily adapt to the effects of climate change.

Improve cash flow management with Silo

Building a more sustainable and resilient future means recognizing the benefits of climate smart commodities and encouraging environmentally-responsible practices for production.

To prepare for the future, it’s vital to ensure that your business is not only sustainable, but has the ability to bounce back from changing circumstances. Consistent cash flow is crucial in this regard.

Silo is here to help. Silo brings a holistic approach to your cash flow management. You can connect all of your financial workflows for greater visibility and access Silo Capital to fill dips and pivot quickly. Master your cash conversion cycle and improve your business’ financial health with a platform that not only allows you to better optimize how to source, sell, and collect, but gives you access to working capital to weather storms and invest in growth.

Book a demo with Silo today!