Using agro-environmental models to design a sustainable benchmark for the sustainable value method

Farms contribute heavily to overall sustainability. To date, various frameworks, approaches, methods and indicators have been developed to appraise how much corporations (firms, farms) contribute to sustainability. Among these, the Sustainable Value (SV) method helps to determine by which economic entity resources should be used in order to achieve the highest contributions to sustainability, by comparing company's efficiency of capital use against the efficiency of a benchmark. In this work we argue that the SV benchmark does not include certain crucial environmental concepts, such as the carrying capacity of an ecosystem or the multiple vital functions provided by ecosystem services. Thus, it is not a suitable reference for companies to evaluate their contribution to sustainability. As an alternative benchmark to standard SV applications, we propose a farm whose resource use productivity is correlated to the fulfilment of pre-determined environmental constraints: the Environmentally Sustainable Farm (ESF). To design this farm, we created an agro-environmental farm modelling framework that includes: (i) methods and approaches to assess indicators concerning specific environmental issues; (ii) an integrated ecological-economic model based on linear programming. This farm modelling framework is employed to determine both the environmental performance and the economic returns of two farming systems, conventional (CFS) and organic (OFS), which are compared using the Sustainable Value approach. Despite the fact that the OFS environmentally outperforms the CFS, none of them reaches the sustainable performances achieved by the ESF, both performing a negative Sustainable Value. The environmental constraints forced the ESF towards management choices that, although decreasing the economic performance, increase its environmental sustainability behaviour. Hence, the ESF is a viable benchmark that can be used to evaluate farms' environmental sustainability.