EC1 – Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings and payments to capital providers and governments
|Employee wages and benefits
|Payments to providers of capital
|Payments to government
|Economic value retained
EC2 – Financial implications and other risks and opportunities for the organization’s activities due to climate change
Yara has considered climate change and the risks and opportunities it presents to the company. However, Yara has not yet quantitatively estimated the financial implications of climate change, but acknowledges that it is expected to have a profound effect on world agriculture and consequently on the activities of Yara as well as Yara’s customers. Climate change also offers significant business opportunities, particularly in the field of improving the efficiency of farming while reducing emissions. At the same time, the European Emission Trading Scheme (EU ETS) coming into force from 2013 will lead to added costs for the already energy-efficient fertilizer industry in Europe.
In 2010, Yara continued its global engagement basically in two ways: By catalyzing action and through developing and offering knowledge-based solutions. Internally, Yara improved its operational performance on greenhouse gas (GHG) emissions.
The intertwined issues of food security and climate change are particularly relevant to Yara's business strategy, market position and societal role. Also, the complex issue of resource scarcity, particularly with regards to the availability of land and water, is of vital importance to Yara - and to society.
Yara's business is directly related to food production. With its agronomic solutions, Yara contributes to improving food security mainly by enhancing cropland productivity - increasing yields. By increasing farm output, Yara also contributes to improve the profitability of farming, which is a prerequisite for sustainable agricultural development.
Yara's operations depend heavily on the use of fossil energy, causing emission of GHGs. But with its technology solutions, Yara has reduced its emissions and improved its energy efficiency. Also, by improving agricultural productivity, Yara helps to stall land use change for agriculture, a main driver of climate change.
In 2010, the Global Conference on Agriculture, Food Security and Climate Change in The Hague concluded that no other sector than agriculture "offers greater synergies between food security and climate change."
Based on the discussions in the Hague conference, in which Yara participated, the World Bank presented a new roadmap at the Cancún climate summit. It outlines actions linking agriculture-related investments and policies with the transition to climate-smart growth. Policies and programs highlight a "triple-win" approach: First, to increase farm productivity and incomes, secondly, make agriculture more resilient to variations in climate, and thirdly, to make the agricultural sector part of the solution to climate change rather than a part of the problem.
Yara consistently addresses the issue of resource scarcity in its operations and seeks to offer relevant and valuable contributions throughout the value chain.
Regarding land scarcity
In 2010, Yara continued its work on improving land-use efficiency through improved management methods, offering its agronomic knowledge and crop nutrition concepts to improve cropland productivity.
Regarding water scarcity
In 2010, Yara intensified its innovation efforts in the field, with the aim of developing a corporate approach to water use efficiency, mainly by improving its fertigation solutions.
Regarding nutrition shortages
In 2010, Yara pursued its dissemination of crop knowledge to growers, particularly through its Crop Nutrition Concept (see below) and tailored offerings.
European Emissions Trading Scheme (EU ETS)
The fertilizer industry is energy-intensive and a considerable source of GHG emissions. However, there are significant differences in energy-efficiency and emissions levels between regions, with European producers representing the most efficient part of the industry. From 2013, all European ammonia and nitric acid plants will be regulated under the European Emission Trading Scheme. This will lead to added production costs for Yara and other European producers, especially in the ammonia sector.
The European industry is deeply concerned that this will lead to competitive distortion versus non-European producers, resulting in increased imports from less efficient producers outside the EU, with consequent carbon leakages and more global emission of GHGs. Yara expects to meet the new requirements for its nitric acid plants by having installed the company's N2O reduction technology and examines the possibility for further technical improvements in some of its ammonia plants.
EC3 – Coverage of the organization’s defined benefits plans obligations.
Yara’s defined benefits plans are managed locally according to national legislation and agreements with trade unions. Most employees are covered through a defined pension scheme, and most of the pension schemes are managed externally by a professional organization.
|Percentage of countries having pension schemes managed in house
|Percentage of countries having pension schemes that are managed outsourced
|Percentage of countries having: defined pension schemes
|Percentage of countries having: contributed pension schemes
|Percentage of countries having: no collective pension schemes
|Percentage of countries having: Other
EC7 – Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.
Yara aims to recruit senior management that reflects its business needs, presence in local markets and composition of employees. The strategy in regard to locally recruited senior management is generally decided locally. For example, in Greece and Finland, 100 percent of senior management is from the local community. In Trinidad, 85 percent of senior management is from the local community. In 2011, Yara will put in place a more proactive strategy to ensure that senior management in the company truly reflects its diversity.
EC8 – Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement.
Yara’s operations worldwide are engaged in and support a wide variety of community projects and local initiatives for the benefit of the public, adding up to total community investments of NOK 15 million in 2010. More significantly, however, is Yara's business approach of delivering its agronomic knowledge to farmers.
Improving cropland productivity and increasing food production depends on the application of agronomic knowledge. Yara possesses extensive knowledge which is offered as part of its crop nutrition solutions. In addition, Yara contributes to knowledge development and dissemination through global initiatives and partnership projects such as the Ghana Grains Partnership, initiated by Yara in 2008, helping to close the "knowledge gaps" on agriculture mitigation and adaptation, highlighted at the COP 16 in Cancún.
Yara builds its crop knowledge in close collaboration with the market around the world. Cooperating with Yara, local growers, sales representatives and agronomists raise questions, address problems and promote ideas to growers worldwide. Backed by the industry's most complete range of plant nutrition products, Yara can give sound advice, aiming not only for optimal yields but also helping growers obtain the crop quality required by the market. Yara's Plantmaster series is a key element in this knowledge transfer, offering easy-to-use advice on plant growth and fertilizer application for most cash crops.
An example of Yara's method is its knowledge approach in Brazil. In field trials, conducted in close cooperation with external scientists as well as Yara personnel, Yara demonstrated how its Crop Nutrition Concept added value to the farmer, increasing yields while reducing the amount of fertilizers needed. Maize yields increased by 14.5 percent, while the amount of phosphates supplied were reduced by 50 percent. This was achieved by applying the right amount of the right fertilizer at the right time.
Similarly, in the Vietnamese districts of Lam Dong and Daklak, Yara conducted field trials on coffee. Yara's advice to farmers included lower fertilizer application rates but higher yields with improved quality. The farmers increased their incomes by more than USD 400 per hectare.
In 2010, Yara together with its partners secured international endorsement for the company’s Agricultural Growth Corridors concept, an innovative approach to regional development in Africa.
The Ghana Grains Partnership
The Southern Agricultural Corridor
The Beira Agricultural Corridor
EC9 – Understanding and describing significant indirect economic impacts, including the extent of impacts
As the world's leading producer of mineral fertilizers, Yara is a key player in improving agricultural productivity and securing a profitable, viable business for farmers around the world. Therefore, Yara understands the indirect and direct economic impacts it can have by selling its products. Yara offers a wide range of fertilizer products - and extensive agronomic knowledge that is shared with the farming community. The company has supported development programs in Africa and works closely with customers all over the world to help them best use Yara's plant nutrients to boost their yields.
More information on adding value to the agricultural sector can be found here:
Yara's concept of Agricultural Growth Corridors is a prime example of how Yara utilizes its knowledge and engages with other stakeholders to create shared value:
Agricultural growth corridors and African partnerships
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