Over half of the world’s crop yields are attributable to fertilizer, so fertilizer must be central to any discussion of global food security.
The fact is, each day the world has 150,000 new mouths to feed. The expanding middle class, with its increasing demand for resource-intensive proteins such as meat, plus climate change and water scarcity—all of these factors add to the pressure on global agriculture. Clearly, feeding a growing, changing world is one of the defining challenges of our lifetime.
Mosaic’s mission is to help the world grow the food it needs. We believe the answer to this monumental challenge lies in “sustainable intensification”—producing more food, sustainably, and in a way that respects and preserves our natural world. We simply cannot achieve this without the many benefits of mineral fertilizers.
Fertilizer nourishes plants, which in turn nourish people. When appropriately applied, Mosaic’s products—phosphate and potash crop nutrients—help farmers get more food and grain out of each acre they farm. Without fertilizer, much more land would be required to meet global demand—which contributes to deforestation and biodiversity loss.
To help promote efficient fertilizer use, Mosaic supports the 4Rs Nutrient Stewardship Framework—using the Right Source of fertilizer at the Right Rate, at the Right Time and in the Right Place. This program encourages farmers around the world to be good stewards of the environment while maximizing their yields.
Business conditions—good or difficult—do not and will not change Mosaic’s commitment to sustainability. Success comes when we make smart choices about our stewardship of the environment, how we engage our people and our communities, and how we manage resources. Our financial strength allows us to continue investing in our company’s sustainability progress, regardless of market conditions.
We were tested in 2013 by lower market prices for potash and phosphates due to increasing global supply and inconsistent demand in certain parts of the world, most notably India and China. I’m proud that at Mosaic, we navigated through these challenges and produced solidly profitable business results, all the while keeping the sustainability of our business in mind.
We chose to use the tough environment as an opportunity to grow and refine our business portfolio. We are increasing our investment in Brazil’s agricultural promise by agreeing to purchase Archer Daniels Midland Company’s fertilizer distribution business in Brazil and Paraguay, a move that complements our expansion plans already underway. We also acquired CF Industries’ phosphate operations in March 2014, and entered into a phosphates joint venture with Ma’aden and SABIC in Saudi Arabia. We also reached difficult decisions to divest underperforming assets in Chile, Argentina and Michigan. We expect these decisions to increase not only our operational efficiencies, but also our agronomic and economic impact in key agricultural markets.
As the world’s largest producer of phosphate and potash, our top priority is helping farmers in key agricultural areas produce more corn, wheat, soybeans, potatoes and other crops. We also have a responsibility to promote good nutrient stewardship throughout the supply chain—from mine to market.
We wanted to better prioritize and understand all the myriad issues material to our stakeholders, so in 2013 we conducted a materiality study with a third-party auditor. The valuable and impartial insights we received are helping us identify the most important actions we must take to further reduce our environmental footprint, in ways that are most meaningful to our stakeholders. We expect to finalize our materiality analysis in 2015.
Maintaining a healthy, safe work environment has been, and will always be, a primary focus for Mosaic. We were extremely troubled by the tragic accident in February 2014, which resulted in the fatality of a contract employee working on one of our Florida phosphates properties. We have conducted a thorough investigation and have shared what we learned, to avoid a future fatality.
Mosaic’s safety culture has evolved significantly, and our overall safety performance in 2013 was statistically our best ever—but we must continue in our relentless pursuit of an injury-free workplace. This is more important than ever as we welcome 1,200 new employees through our completed and pending acquisitions.
We have made good, consistent progress in the five years since we first published a sustainability report. In our operations, we’re particularly proud of our efforts in the areas of water conservation, land reclamation, the use of alternative energy sources and reducing our carbon footprint.
Our Florida phosphate manufacturing facilities operate on more than 90 percent recycled water, and we continue to find new ways of reducing our water footprint. We’re even working with other local businesses on responsible water use: Mosaic partnered with Duke Energy to eliminate up to 4.6 million gallons per day of groundwater withdrawal in Polk County, Florida.
To better understand our environmental performance, we have tracked our greenhouse gas emissions since Mosaic’s inception in 2004—and we work to reduce emissions intensities year over year. Since 2008, we have improved our total energy consumed per tonne of finished product by over 10 percent. A portion of that savings is due to clean electrical cogeneration from the recovery of waste heat in our operations. In 2013, we produced enough electricity—approximately 6.24 million gigajoules—through cogeneration to satisfy 44 percent of our companywide electrical demand. We used more than 1 million gigajoules of this emission-free cogenerated electricity in our mines.
Mosaic’s best-in-class Florida reclamation activities begin before we mine. First, we work with a dozen local, regional, state and federal regulatory agencies to ensure all mined areas can be successfully reclaimed—and to identify areas of high environmental sensitivity that should be protected. Our teams of professional biologists, hydrologists and other specialists take great pride in the exceptional quality of our reclamation work, and we focus on creating successful, sustainable habitats for diverse wildlife.
We are also finding new ways to reduce our indirect energy consumption. In 2013, we completed the conversion of our Central Florida truck fleet to clean-burning compressed natural gas. We are pleased that the new fleet will allow us to operate more safely, lower our customers’ costs and reduce emissions.
Thanks to the work of our teams in operations, environmental, health and safety, supply chain and engineering, Mosaic has made great strides in reducing energy use and emissions profiles, earning the company recognition.
Since 2009, Mosaic has reported the greenhouse gas (GHG) inventory of more than 50 facilities in seven countries to the Carbon Disclosure Project (CDP). In 2013, we were included in the CDP S&P 500 Climate Disclosure Leadership Index and the CDP S&P 500 Climate Performance Leadership Index. We are proud Mosaic is the first crop nutrition company to be recognized for inclusion in these indices.
Additionally, Mosaic was one of 35 global companies included in the Trucost Natural Capital Leaders Index. We were noted for our record of economic success without environmental degradation.
The concept of sustainability has evolved tremendously through the years, and we must continue to learn so that we can keep pace with change. We are evolving in our approach to sustainability. Part of that process is assessing the myriad challenges, and determining where we can make the greatest impact for our stakeholders.
Some of our biggest challenges belong to the crop nutrition industry as a whole, and require consensus and collaboration. One of those issues is nutrient stewardship. We make products that are essential to humankind, and, like many other products, responsible use is critical. As an industry, we need to do more to ensure that our retail and distribution partners, as well as farmers, have the tools they need to grow crop yields sustainably.
Another issue of critical importance in our industry is product safety and security. We have joined with The Fertilizer Institute and the Agricultural Retailers Association in support of the new ResponsibleAg initiative, which will facilitate fertilizer retailers’ compliance with federal safety and security regulations and provide access to comprehensive inspections. The safety and wellbeing of our people and our communities is paramount for us at Mosaic, and we are pleased that this program will help our customers more easily understand and conform to a common standard.
In the end, sustainable intensification remains our most compelling challenge—and it gives our business purpose. Every day, our people are driving new innovations, finding ways to work safer and smarter, and developing better, more efficient processes that move the company forward. We believe that our sustainability efforts lead to greater shareholder value—and help us achieve our mission of helping the world grow the food it needs.
Factors affecting our market, including impacts and risks, are summarized within Mosaic’s 10-K Report (pages 25-47).