Why environmental, social and governance issues now matter at farm, processor and board level

Environmental, Social and Governance, widely referred to as ESG, provides a framework for understanding how sustainability-related matters affect a business and how its activities affect people and the environment.

The environmental pillar covers areas such as climate change, energy, water, pollution, biodiversity and the use of natural resources. The social pillar concerns matters such as working conditions, health and safety, human rights and relationships with local communities. Governance relates to how an organisation is directed and controlled, including business ethics, risk management, internal controls, accountability and oversight of sustainability matters. These environmental, social and governance dimensions are also reflected in the European Sustainability Reporting Standards (ESRS).

For agribusiness, ESG is particularly relevant because commercial performance is closely connected with natural resources, environmental conditions, people and the long-term resilience of rural communities. In Cyprus and Greece, ESG can therefore provide a practical framework for identifying significant risks, improving resource efficiency and incorporating sustainability considerations into business strategy and decision-making.

A sector facing structural pressures

Agriculture in Cyprus and Greece is largely characterised by small, family-based farms. Cyprus has around 35,000 farms, with an average size of three hectares, while Greece has approximately 600,000 farms, averaging seven hectares.

In both countries, agricultural policy increasingly connects sustainability with resilience, innovation and competitiveness. Cyprus’s  Strategic Plan focuses on a stronger primary sector, sustainable rural development, protection of the environment and responsible use of natural resources, while Greece’s  Strategic Plan links competitiveness with innovation, new technologies and reducing agriculture’s environmental footprint.

Recent developments in Cyprus provide a practical example of why resilience matters in agribusiness. The 2026 outbreak of foot-and-mouth disease required animal-health measures, including movement restrictions, biosecurity controls and vaccination. The European Commission also mobilised veterinary expertise, emergency supplies and vaccine doses to support Cyprus’s response. The situation demonstrates how animal-health risks can rapidly become operational and financial challenges for farms and the wider agrifood value chain.

For smaller agribusinesses, limited resources, environmental pressures and increasing sustainability expectations can present challenges. At the same time, these pressures reinforce the importance of integrating sustainability into business decisions rather than treating it solely as a reporting requirement.

ESG reporting extends beyond companies directly in scope

Under the Corporate Sustainability Reporting Directive (CSRD), companies within its scope are required to report sustainability information in accordance with the European Sustainability Reporting Standards (ESRS). The framework is designed to provide information about sustainability-related risks and opportunities, as well as companies’ impacts on people and the environment, enabling investors and other stakeholders to assess sustainability performance.

Many farms and smaller agribusinesses may not be directly subject to mandatory sustainability reporting. Nevertheless, businesses outside the mandatory reporting perimeter may still receive requests for sustainability information from larger companies and financial institutions. Recognising this, the European Commission has introduced a voluntary sustainability reporting framework for smaller companies, designed to provide a proportionate approach to such information requests.

ESG readiness is therefore relevant across the agrifood ecosystem. Businesses that establish proportionate systems for monitoring matters such as energy use, water consumption, waste, emissions, employment practices and supply-chain risks will be better positioned to provide credible sustainability information when required.

From compliance to business value

The strongest case for ESG is not simply the publication of a sustainability report. Its value lies in the information it provides to management and how that information is used in decision-making.

For agribusinesses, reliable environmental and operational information can highlight inefficient water or energy use and exposure to climate, biosecurity and other operational risks. Social information can help businesses understand workforce, health and safety and training matters, while strong governance supports accountability, risk management and the reliability of information provided to lenders, investors and customers.

In Cyprus and Greece, these considerations increasingly overlap with competitiveness. Agricultural policy in both countries places emphasis on sustainability, resilience and innovation, reflecting the broader objectives of the EU’s Common Agricultural Policy.

In practice, a structured approach to ESG can help agribusinesses:

• identify and manage climate, water, biosecurity and supply-chain risks;
• identify opportunities to improve resource efficiency;
• support investment decisions in technology and more sustainable production;
• respond to sustainability information requests from customers and financiers; and
• strengthen the credibility of the information provided to stakeholders.

 

The opportunity, therefore, is to move ESG beyond a reporting exercise and use the information it generates to support a more resilient, efficient and sustainable agribusiness.

A practical starting point

Agribusinesses do not necessarily need to begin with lengthy reports or complex data systems. A proportionate approach can start with the information most relevant to the business and build from there.

1. Map the value chain. Identify where significant environmental and social matters arise across the business and its value chain.
2. Identify the material issues. Focus on sustainability matters relevant to the business and its impacts on people and the environment.
3. Establish a baseline. Assess what reliable information is already available from existing business records before introducing additional data collection.
4. Select relevant indicators. Establish measurable indicators and clearly define responsibility for collecting and reviewing the underlying information.
5. Set realistic targets. Where appropriate, connect sustainability objectives with operational and investment plans.
6. Report with balance. Sustainability information should provide a credible representation of performance, including areas where further progress is required.

The aim is to move ESG information beyond a year-end reporting exercise and integrate it into budgeting, investment appraisal and risk management.

 

How we can help

Our experts can support agribusinesses throughout their ESG journey, from identifying relevant sustainability risks and establishing appropriate performance indicators to ESG reporting, assurance and wider accounting and advisory support. By combining technical expertise with a practical understanding of business needs, we help organisations move beyond compliance and use ESG information to support better decision-making, resilience and long-term value creation.