Case Study | 26 August 2025
How an Indian Agricultural Firm Turned ESG Risks into Sustainable Growth Success
Posted by : Ipseeta Dash
An Indian agricultural company specialized in producing and distributing various food crops and had a strong presence in the domestic and international markets. However, the company had been focusing solely on short-term profitability and growth and was found neglecting environmental, social, and governance (ESG) practices. As a result, the company found itself at the receiving end of fines and penalties from regulatory bodies. This considerably damaged the company’s reputation and negatively impacted the stakeholder perception. The company requested Research Nester analysts to draw out a plan of action to facilitate a smooth integration of ESG solutions into the company’s policies and practices.
An overview:
- Established in 2008, the company developed into a mid-sized enterprise with operations concentrated in Madhya Pradesh.
- Its business spanned cultivation, processing, packaging, and distribution of wheat, sorghum, pulses, and vegetables.
- While revenues grew steadily, sustainability was overlooked, causing environmental damage, water contamination, and biodiversity loss.
- Non-compliance with ESG standards led to regulatory penalties and restrictions.
- The crisis resulted in declining sales and the loss of retailers who moved toward more sustainable suppliers.
- The leadership engaged RNPL to create a structured plan for integrating ESG practices into daily operations.
The Story
The company was started in 2008 with the motive of becoming a major contributor to India’s food supply chain. Over the years, it expanded farmland, built processing facilities, and achieved consistent growth. By 2016, it was showing a healthy 12% annual growth rate and had even tapped into export markets.
But the widespread expansion masked critical shortcomings. Farming practices leaned heavily on chemical fertilizers and pesticides. Soil quality deteriorated, water sources were polluted, and local communities reported growing health risks. To increase production, large patches of natural habitats were cleared, which further reduced biodiversity.
By 2018, authorities mediated. An inquiry under the Environment Protection Act, 1986, highlighted widespread non-compliance with environmental and social standards. The company was penalized, and some of its export permits were suspended. Media coverage of the issue damaged its credibility, and the negative publicity triggered a chain reaction:
- Consumer Backlash: End customers became choosy about purchasing products linked to ecological harm.
- Retailer Shift: Buyers and retailers switched to suppliers with verified sustainability credentials.
- Investor Hesitation: Investors became careful, pulling back from funding expansion or modernization projects.
By the end of 2019, the leadership felt that it had to act decisively. To rebuild its market position and achieve long-term survival, the company approached RNPL for strategic assistance.
Our Solution:
RNPL consultants found that the company’s vulnerabilities rose from its outdated farming practices, improper supply chain management, and lack of ESG governance. They created a phase-wise ESG transformation plan, personalized to agriculture’s unique challenges:
Regenerative Agricultural Practices
- Launched no-till cultivation, crop rotation, and cover cropping to revive soil health.
- Integrated livestock cycles into farming to enhance fertility.
Created biodiversity corridors to balance ecosystems within cultivated areas.
Cutting Down Chemical Use
- Replaced synthetic fertilizers with compost, biofertilizers, and natural manure.
- Phased-in biopesticides made from neem, garlic, and corn gluten.
- Launched farmer training programs to encourage safe and sustainable alternatives.
Water and Irrigation Management
- Installation of drip irrigation systems to enhance water efficiency.
- Construct rainwater harvesting structures to decrease reliance on groundwater.
- Developed wastewater treatment systems to prevent chemical runoff into nearby rivers.
Optimizing the Supply Chain
- Used real-time tracking systems to control demand and pricing fluctuations.
- Partnered with local cooperatives for better distribution and community participation.
- Certification processes for sustainable produce to attract eco-conscious buyers.
Governance and Social Responsibility
- Established an ESG compliance committee within the company to oversee long-term sustainability.
- Publishing transparent ESG disclosures and sustainability reports.
- Engaged local communities through training sessions, healthcare support, and job creation.
Brand Repositioning
- Restructured the company as a trusted, sustainability-focused agricultural business.
- Ran campaigns showing ESG commitments to regain consumer trust.
- Targeted global buyers with certifications such as Fair Trade and GlobalG.A.P.
Results
The incorporation of ESG practices resulted in measurable and long-term benefits:
Financial Recovery
- After losses in 2018–19, revenues became stable in 2020.
- Sales climbed to INR 350 million in 2020, a 10% increase over 2019.
- Growth accelerated to 18% in 2021 and 27% in 2022, surpassing pre-crisis levels.
Market Position
- Regained the best domestic retailers and entered new export markets by 2021.
- Certified sustainable products demanded a 12–15% price premium.
Stakeholder Trust
- Transparent disclosures restored investor confidence, bringing in fresh funding.
- Retailers began actively promoting the brand’s sustainability credentials.
Environmental Gains
- Chemical fertilizer use dropped by 40% in two years.
- Soil fertility indicators showed consistent improvement.
- Water usage per acre declined by 25% due to modern irrigation.
Social Impact
- Community employment grew by 20%, backed by training initiatives.
- Health complaints tied to pesticide exposure fell significantly.
Future Outlook
- The company positioned itself as a leader in ESG-driven agriculture in India.
- It formed a five-year ESG roadmap, assuring continuous monitoring and adaptation.
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