Of the trends affecting our markets and supply chains, we have identified three key global challenges where delivery of our Commitment can maximise positive impacts on planet and society. Our response to each continues to develop as we work towards our Commitment to be Climate, Land and People Positive by 2030. Aligning our work with the United Nations Sustainable Development Goals (SDGs) ensures Croda is tackling the most important challenges to deliver positive impact.
World population passed eight billion in 2022 and is expected to reach nearly ten billion by 20501 with the majority of the increase coming in South and East Asia, and Africa. Feeding this growing population will require a 70%2 increase in agricultural output by 2050, and the challenge is achieving this in a sustainable, regenerative way. Agriculture has undergone yield-enhancing shifts in the past but yields of important crops such as rice and wheat have now stopped rising in some intensively farmed parts of the world. Agricultural soils have been overused and overexposed to chemical fertilisers, destroying their vitality and threatening the food security of 3.2 billion people3, especially poor rural communities and smallholder farmers. Since most suitable land is already farmed, most of this growth will come from higher yields and more resilient crops in less suitable land, supported by restoring degraded ecosystems.
1. United Nations, World Population Prospects 2022
2. Food and Agriculture Organization of the United Nations, Global agriculture towards 2050
3. The Global Environment Facility, Land Degradation
Population growth and increasing consumption, fuelled by the expansion of the middle class with increased disposable income in the developing world, are putting pressure on planetary systems, such as water, climate, biodiversity and scarce natural resources. Addressing this challenge requires transformational new approaches to consumption and circularity.
For example, one of the greatest challenges of the coming decades is not only the transition to a carbon net zero society but doing so by embracing the role nature plays in mitigating and adapting to climate change and addressing social inequalities. Consumers, primarily in developed markets but increasingly in China and around the world, are supporting businesses they believe act responsibly, understand these societal challenges, protect and restore nature and provide solutions to mitigate the causes and adapt to the negative impacts of a changing climate.
Digitalisation facilitating faster, more connected supply chains
Digital is changing expectations about transparency, with consumers demanding businesses take responsibility for not just their own operations but also their supply chains and end of life of their products. Digital is also increasing the speed at which new trends are adopted and enabling businesses to deliver transformative solutions from wherever they are conceived. Successful products are those which are innovative, highly effective, low impact, sustainably sourced and clearly labelled.
Megatrends in our markets
In response to these global challenges, the Consumer Care and Life Sciences markets have inspired two technological megatrends, where innovative ingredients from leading suppliers like Croda can support the delivery of significant positive impact on planet and society.
Move to sustainable ingredients
Consumers want to live more sustainably, which influences their decisions when purchasing products. Generational shifts are accelerating these trends, increasingly consumers are willing to pay more for purpose-led brands that meet their specific values. Sustainability will be the biggest single driver of consumer markets over the next decade and beyond.
Consumer-facing companies need to enhance consumer trust in their brands, so are looking for ingredients that enable them to deliver products with proven, substantiated claims and transparent, assured information on their social and environmental footprints. Sustainable ingredients must have a low footprint in terms of the carbon, water and resources used in their manufacture, and should also contribute to enabling consumers to live more sustainably.
Growing consumer demand for sustainable ingredients is driving increased regulation by industry and national authorities. For example, there are now very few countries in the world without cosmetic legislation and an increasing number of countries also have chemical regulations in place, with many more set to adopt chemical legislation in the coming years. Increasingly widespread and thorough legislation is providing a higher threshold for approval for new ingredients while increasing consumer confidence about the footprint and sustainability benefits of the products they buy.
The move to sustainable ingredients is not confined to consumer markets. Not only do crop science companies want biodegradable ingredients with a low carbon footprint, they also need innovative ingredients that make a positive contribution to improving yields, soil health and biodiversity. Alongside more sustainable chemistry, biotechnology can be a highly sustainable route for creating new and existing molecules that have applications in high growth markets of today and the future. Designed correctly, biotechnology will enable ongoing performance innovation, facilitate ingredient footprint reduction, and support the transformation to bio-based ingredients.
Move to biologics
In Life Sciences, the 20th century was the era of the small molecule: relatively simple compounds made by chemical synthesis. The 21st century is the era of biologics: giant molecules manufactured inside animal cells or micro-organisms, that are already transforming medicine and will transform agriculture over the next decade.
Biologic drugs mimic closely our body’s biology and are much better at treating disease in a targeted way with fewer side effects. But they are complex molecules that are hard to make, difficult to keep stable, and need sophisticated delivery systems. They are also difficult to administer and are normally injected because otherwise they would be destroyed by stomach acid when swallowed.
The nucleic acid revolution that we are now witnessing, best illustrated by the global roll out of messenger ribonucleic acid (mRNA) vaccines for COVID-19, is the next phase in the move to biologics. It is creating an incredible number of opportunities because nucleic acids teach the body to create its own medicine. This is a fundamental shift in the complexity of new drugs and in their value – both in terms of patient outcomes and commercial opportunities for pharmaceutical companies.
Although crop science is some years behind, it is also experiencing a transformation to biologically active ingredients. For example, naturally occurring microbes act as fertilisers for plants but have yet to be exploited systematically to raise crop yields. The nucleic acid revolution is also making new approaches possible in agriculture. For example, ribonucleic acid (RNA) interference could be used as a precisely targeted, environmentally friendly pesticide, by preventing the production of a critical molecule in the body of a specific pest.
The ability for these biologics to target specific elements in the host offers a significant opportunity to reduce negative impacts on the planet and society. Increased targeting means reduced overall dosage, less unintended side effects and fewer resources to produce the same benefits. Novel performance means new approaches such as improved vaccination to both prevent and cure diseases, and regenerative agriculture that leverages the power of nature.
Positioned to benefit from these megatrends
Through the divestment of most of our industrials business, and the acquisitions we have made in recent years, Croda has significantly repositioned to be more closely aligned with the powerful megatrends that are reshaping our markets. We are becoming a pure play company, focused on high value niches in consumer care and life science markets.
We are positively impacting everyday life in Consumer Care, developing ingredients which help promote consumers’ wellbeing, confidence and self esteem. Having refocused our Pharma portfolio, we are pioneering the future of health care by focusing on segments with the highest development needs. With the crop care market at a pivotal point in its development, we are innovating for sustainable agriculture, helping to address the sustainability challenges of today, and developing new systems for the delivery of the biopesticides of tomorrow.
Read more about sustainability being at the heart of what we do:
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