Sustainable wine boosts the bottom line

A new sustainability index is helping wine-grape growers make better business decisions.
Annual Report 2017-18.pdf

Sustainable farming practices are not just good for the environment, they are good for the bottom line and a new sustainability index is helping wine-grape growers make better business decisions.

Developed by a team of researchers working with the banking sector, the Resource Intensity Score (RIS) is used to link sustainable farming practices, including water use, energy use and carbon emissions, to financial performance in the wine-grape industry.

The RIS was developed as part of a Food Agility Cooperative Research Centre project with the Australian Wine Research Institute (AWRI), National Australia Bank (NAB) and Queensland University of Technology (QUT).

Project leader and Manager of Sustainability and Viticulture at the AWRI, Dr Mardi Longbottom, said the RIS built on more than 10 years of data from AWRI’s Sustainable Winegrowing Australia program and its predecessors Entwine Australia and Sustainable Australia Winegrowing.

“Viticulture is ahead of the game when it comes to natural capital data collection for sustainability and the RIS is the first sustainability index of its kind in Australian viticulture,” said Dr Longbottom.

“Using the RIS, we benchmarked the production and resource use data of almost 400 growers from across Australia. Then, for a group of 67 growers, we analysed the RIS against their financial data and found that the most profitable vineyards also tended to be the most resource-efficient.”

The research found that vineyards with the top 10 percent gross margin tended to be more resource-use efficient than those in the bottom 10 percent. To produce one tonne of grapes, the top 10 per cent of vineyards:

  • used approximately half of the water;
  • used 60 percent less energy; and
  • emitted 60 percent less carbon.

Associate Director of Natural Capital at NAB James Bentley, said linking sustainability and financial measures gave a more complete picture of business resilience.

“The traditional way of thinking about financial risk is to look at the value of assets and past financial performance. We know sustainability is an important business consideration so this is an important first step,” said Mr Bentley.

“As a bank, we want to support agribusinesses that are managing their resources sustainably and using the available data to make good, long-term business decisions.”

QUT data scientist Associate Professor Richi Nayak led the data analysis in the project and envisages that future work to improve sustainability and financial models will benefit growers, the wine industry, other agricultural sectors, and financial institutions.

“These metrics can be used to underpin future models that will enable financiers to better understand how natural capital impacts business resilience,” said Associate Professor Nayak.

Following the successful pilot, the AWRI, NAB and Food Agility are investigating how the RIS could be further improved, and its potential use more broadly across viticulture and other primary production sectors.

For more information see the Food Agility project page: www.foodagility.com/projects/valuing-nature-in-viticulture

Dr Mardi Longbottom, Project leader and Manager of Sustainability and Viticulture at the Australian Wine Research Institute (image supplied by Australian Wine Research Institute).
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