Environmental impacts of farming

Unsustainable agricultural and aquaculture practices present the greatest

immediate threat to species and ecosystems around the world.

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Farmed areas both on land and in the water provide important habitats for
many wild plants and animals.

When farming operations are sustainably managed, they can help preserve and
restore critical habitats, protect watersheds, and improve soil health and water
quality.

But when practiced without care, farming presents the greatest threat to species
and ecosystems.

Indeed, many of WWF's priority places and species are negatively impacted by
agriculture and/or aquaculture.

Multiple impacts

Negative environmental impacts from unsustainable farming practices include:

Land conversion & habitat loss

Wasteful water consumption

Soil erosion and degradation

Pollution

Climate change

Genetic erosion
On Thursday 18th October 2012 as part of Biology Week
2012 Professor Jonathan Foley and Dr Hanna Tuomisto
answered your questions during a live online Q&A about
the environmental impact of organic and conventional
farming on the land used. Find out more about Hanna and
Jon here. This discussion was also tweeted about under
#landuse, view the storify here.

If you have a question on a plant science related issue then

get in contact with our plant science panel via
Twitter, @senseaboutsci using #plantsci, or email us
atenquiries@senseaboutscience.org. What topics are you
interested in and what questions do you have?

1. "I know the yields are higher, but isnt conventional farming reliant on
agrochemicals and artificial inputs which negate soil fertility and pollute
land, rivers and streams?"

JF: That's the general assumption. Organic systems typically use less chemicals and
other inputs (but not always), which should be better for the environment overall,
but often at the expense of lower yields (shown in a paper by Seufert et al. in
Nature this year). In general, lower yields and lower environmental impacts
characterize organic systems. And higher yields and higher environmental impacts
for conventional. That's the supposed trade-off. But I am interested in blending the
best of both worlds, and finding high yield / low impact agricultural solutions. I don't
think that either organic or conventional are "better": they are different approaches
to growing food, each with their pros and cons, and each representing a
different trade-off. Why not take the best of both worlds?

HT: The optimal farming system would most likely be something between the
current organic and conventional farming. Conventional farms can reduce the inputs
by relying more on natural processes and using nutrient cycling and versatile crop
rotations. A full ban of agrochemicals is not necessarily the optimal solution even in
the terms of environmental impacts.

2. "If we want to increase yields doesnt that mean we have to use a lot
more pesticides?"

JF: Not necessarily. Pesticides are not always a key to increasing yields, especially if
we manage pests with a more integrated approach, including organic and
"integrated pest management" techniques. More diverse landscapes, and those with
natural pest predators, can help control pests with much less insecticides. This can
be done in any farming system - conventional or organic. I'm hopeful we can use
these approaches on all farms, not just the organic ones."

HT: Not necessarily.Plant breeding may help to produce varieties that produce high
yields without increasing the use of pesticides. Careful design of crop rotations can
also prevent pest and weed problems.

Jonathon Harrington (email) 3. "Do pesticides used in organic farming have

to go through the same rigorous testing procedures as those used on
conventional systems?"

HT: All new pesticides have to go through the same testing procedures regardless of
the farming system they are used in. Organic farming standards limit the use of
pesticides, so most pesticides that are accepted in conventional farming are not
accepted in organic farming.

@GIAradottir 4."What are the panelists views on land sharing vs land

sparing. Which is preferable?"

JF: Good question! But I don't think it should be an either-or choice. Land sparing is
probably the top priority overall, at the global scale, especially in critically
endangered ecosystems like tropical rainforests. But I think land sharing should also
be a priority for agricultural systems, where possible. And I don't believe it is
a tradeoff, necessarily, if we can find highly productive agricultural systems that can
do some degree of land sharing, while simultaneously sparing as much as possible
for nature.

HT: The answer to this question depends on the aims. If the aim is to maximize the
wildlife benefits, it depends on what type of wildlife/landscapes the society values.
Land sparing may allow converting agricultural land to other uses such as forests,
and therefore supports different species than land sharing would support.

@SLSingh 5. "Should we label organic food 'Warning, land-inefficient

product, may cause damage to the environment'?"

HT: Organic yields are generally lower than conventional yields. However, this is not
always the case. In particular, legume crops have very similar yields in the two
systems.

JF: A provocative question! The point here is that organic systems typically (shown
in Seufert et al., Nature, 2012) have lower yields than conventional farms, and
thereby need more land to produce the same food. However, this neglects the
effects of the larger food system, for instance whether the crops are used for human
consumption, animal feed, biofuels, etc, or how much of the food is wasted. Instead,
I would like to see *all* food labelled with a measure of their *performance* - not
whether the farm follows a particular ideological framework or not: How much land
did it take to make these calories? How much water? How much carbon? How
many chemicals? And then let people decide what's best.

6. "Please could you give your opinions on whether it is better to use less
land to grow crops more intensively or more land less intensively?"

JF: I think we need to do a mixture of both. For example, let's have some intensive
(high yields/small area) production of core staple crops (e.g. rice, wheat, maize),
and maybe some low intensity but wide spread pockets of high nutrient crops (e.g.
fruits and vegetables). There are trade-offs to both approaches, so I think we need
to take advantage of both and use each where they are best suited.

HT: I would say that sustainable intensification might be the way forward. This
would mean using practices that produce high yields while minimising the negative
environmental impacts. Incentives should also be created for leaving some land
aside for wildlife conservation purposes and carbon mitigation.

7. "Would reducing meat consumption ease pressure on land use?"

HT: Yes. For example, the production of 1kg of beef protein requires about 16 times
more land than the production of 1kg of soy protein. Poultry and pork requires less
land than beef but almost 4 times more than soybeans.

JF: Yes, in general, eating less meat would significantly ease the pressure on land
use - especially if the meat is being produced in a grain-fed system. The efficiency of
converting grain into animal products is very low: ranging from 40% for dairy, to
10% for chicken and pork, to only 3% for corn-fed beef. In other words, it takes
about 33 calories of corn for cattle to make a single calorie of beef; the other 32
calories are lost. Reducing the amount of grain-fed beef, for example, would be
tremendously useful in reducing the pressure on land use, especially in the United
States. But not all meat is so inefficient: Grass-fed meat can be an efficient way to
use land to produce food, particularly in less suitable areas."

8. "Is yield the priority, or should we be looking at ways of valuing and

quantifying the biodiversity differences inherent with conventional and
organic farming?"

HT: "Yield levels are also important when biodiversity issues are concerned. Lower
yields mean that more agricultural land is needed to produce the same quantity of
product so areas with natural vegetation may be converted for agricultural land. We
need to look at the whole picture, and find ways to produce food that are good for
the wildlife and environment."

@JustSayIt_MD 9. "Would love to know the stats on how many people you
can feed if you grow food for people instead of growing it for animals"

JF: About 60% of the world's crop production is fed directly to people; about 35% is
used to feed animals; and about 5% is used for biofuels. This varies a great deal
from country to country, of course. In Asia and Africa, most of the crops are fed to
people. In North America and Europe, more crops are fed to animals and used for
biofuels. The 35% used for animals is used quite inefficiently, especially when using
grains to feed cattle for beef production. If we rethink our diets and biofuel
strategies, we could add another ~40% to the world's food supply immediately
without growing another kilogram of crops. Diets matter *a lot*. Side note: See
Foley et al. (2011) in Nature, or my article in Scientific American last year, to see
more about this.

HT: Currently about 70% of the world's agricultural land is grassland. None of that
is suitable for producing food directly for human consumption. Almost 10% of
agricultural land is arable land used for feed production. It would take less than half
of this land to produce the same amount of plant protein than is currently produced
as livestock protein.

@plantscience 10. "What about 'well used' organic pesticides such as

copper sulphate how are these assessed?"

HT: Copper sulphate has been tested in exactly the same way as all other
pesticides, and it is on the list of the accepted pesticides.

11. "Is the supply of inputs required to achieve higher yields non-
organically sustainable? Indefinitely?"

JF: Good question. In the very long term, they are not sustainable. The energy
resources (fossil fuels) and mineral nutrients (mainly phosphate rock) we currently
depend on in industrial agriculture are ultimately limited on the planet - peak oil,
peak phosphorus, and so on. However, technological innovation has a way of finding
new ways to do old things; and I'm certain the renewable energy and mineral
recycling technologies will find their way into agriculture in the coming years and
decades, as these primary resources get too expensive. Furthermore, we
can dramatically (and immediately) improve the energy and chemical intensity of
agriculture, borrowing tricks from organic, and stretch out these resources.

12. "Are indirect land footprint issues considered in land use studies? i.e.
organic systems additional nitrogen must either be grown in situ with
leguminous crops thereby forgoing a fruit or cereals harvest on the land
for part of the time in rotation or imported from elsewhere via animal
manures."

JF: Generally, no, the ""indirect"" effects of how we farm are not fully considered by
most studies. But we need to do this. The amount of land needed to produce the
inputs used in organic or conventional agriculture (for manure, fertilizers, chemicals,
energy, and water) are sometimes quite large. Right now, it's hard to know whether
organic systems use more land than conventional when taking these issues into
account. I suspect, however, that organic might use more land overall, but in a *far*
less destructive way. (Hard to compare manure from pasture to phosphate mine!)
Apple and orange comparisons.
@Gramlin 13. "Should we be recycling human dung into our food chain?"

JF: Hmm. There would be some pluses and minuses to this strategy. On one hand,
recycling nutrients from human waste would be a great way to close part of the
nitrogen and phosphorus cycles of agriculture and the food system. In fact, this is
what a lot of countries do, using "night soil". Parts of China have been doing this for
thousands of years. However, there are some obvious downsides to this strategy in
terms of sanitation and human health. Overall, I think it should be done, but only if
we can do it safely.

HF: In terms of improving the efficiency of nutrient use, it would be beneficial to

return the nutrients from human communities back to the fields as fertilizer.
However, various contaminants in sewage sludge currently restrict this possibility in
many areas.

14. "Conventional farming requires artificial nitrogen production, and this

process has a substantial impact on greenhouse gas emissions. Is it
possible to quantify this as an impact of conventional farming practises
compared with organic farms, which presumably have to transport in
nitrogen (in the form of manure), potentially over large distances?"

HT: The studies show that greenhouse gas emissions of organic and conventional
farming are quite similar when compared per unit of product. The emissions related
to production of agricultural inputs, such as fertilisers and pesticides, are higher in
conventional farming, but organic farming has higher fuel use at the farm.

@BruceWoodacre 15. What "environment" would the UK have without

farming? (serious Q - no "natural" environment in the UK, all created by
agriculture)

HT: If land in the UK was left unmanaged for a long period of time, the natural
vegetation in most parts would probably be forest.

@RebeccaNesbit 16. "Could you explain exactly what land sharing is and
what the benefits are?"

JF: Land sharing"" and "Land sparing" are used to describe how we might farm to
best benefit the environment (especially in terms of biodiversity and wildlife). "Land
sharing" usually means farming in a low-intensity, environmentally "friendly" way to
allow more wildlife and biodiversity on the farm itself. Such farms might have lower
yields, take up more land, but they "share" land with nature. On the other hand,
"land sparing" strategies rely on high intensity, high yield agriculture in small,
focused areas to produce food (even without being wildlife friendly) on smaller
areas, "sparing" land elsewhere for nature.

Mimi Tanimoto 17. (email) "What are the relative pros and cons of
monoculture vs polyculture?"
JF: Monocultures are easier to farm with big machines, which saves on labor costs
and infrastructure. In other words, it's cheaper to farm with industrialized methods.
However, polycultures are far, far better for the environment overall; and
polycultures are also more resilient to climatic disturbances, pests, diseases and so
on. So overall, I think polycultures are significantly better for improving the
sustainability of agriculture - and monocultures are a "house of cards": all
monocultures fail, given enough time.

18. "Is organic farming better for local wildlife?"

JF: Almost certainly. One of the best things about organic farms is that they use far
less chemical inputs - especially different biocides to control pests and disease - that
can inadvertently harm wildlife. Furthermore, organic farms are typically much more
diverse than conventional farms (especially big monocultures of corn and soybeans),
which provides more suitable habitat and better conditions for local wildlife.A farm
doesn't have to be organic, however, to get many of these benefits. Many
conventional farms can do this too, by cutting back on pesticides and having more
diverse landscape mixes. I would like to see more hybrid organic-conventional
approaches used, instead of a fierce battle between the two. Why not blend the best
of both approaches?

HT: Most studies have found higher abundance and richness of wild animal and
plant species on organic than conventional farms. The benefits of organic farming
are larger in intensively managed landscapes than in diverse landscapes with many
landscape features. It is still unclear whether conventional farming with specific
practices for biodiversity conservation can provide higher benefits than organic
farming.

@CarbonTiptoes 19. "How can farmers help bees?"

JF: Use less pesticide. Grow more diverse crops. Leave some land for flowers and
other forms of natural vegetation.

HT: Farmers can help bees by reducing the use of insecticides and herbicides, and
by leaving non-cropped areas for natural vegetation where bees can nest.

@Drystonesonnet 20. "Every year RSPB complains that bird numbers on UK

farms are still dropping. Most farmers in England & Wales signed up to
ag/env schemes. Is this a failure of policy?"

HT: Agriculture is not the only reason for bird losses. Climate change and expansion
of urban areas and transportation infrastructure have an impact on birds too. RSPB
tests the impacts of different agri-environmental scheme practices on birds, and
advises farmers to choose the most cost-efficient options for conserving birds.

Darby Springs Farm (email) 21. "How do we optimize farming systems that
provide ecosystem services as well as food yield?"
JF: I wish I knew the answer to this one! Sadly, the problem is one of today's
economic frameworks: people only get paid for commodities,not for ecosystem
services farms may provide such as maintaining clean water, stable soils, healthy
wildlife, and productive pollinating insects. But if we can find ways to pay farmers to
produce food *and* ecosystem services, which we all benefit from, then we can
see tremendous opportunities for agriculture to work more closely with
the environment. This is beginning to happen with ""water funds"" in Latin America,
and carbon markets elsewhere, but this needs to be dramatically increased
worldwide.

HT: The best approach might be to utilise both natural processes and modern
technologies. The farming systems would be something between current organic and
conventional farming. The practices could include the use of versatile crop rotations,
recycling of nutrients and preventative pest and weed control. Conventional
pesticides and fertilizer could be used if necessary.

22. "Has there been a carbon footprint comparison between conventional

and organic farming techniques for different crop types?"

JF: Probably, but to be honest, I'm not sure I'd believe them as they depend on a lot
of assumptions. But in terms of greenhouse gas emissions, the BIG issues aren't
whether things are farmed organically or conventionally, or whether they're local or
not. The BIG emissions from agriculture stem from three things: deforestation
(mainly for soy and beef in the Amazon, or oil palm and timber in Indonesia),
methane (from rice fields and cattle), and nitrous oxide (from overfertilized
fields, whether conventional or organic). These three things are more than 90% of
global agricultural emissions. The differences between organic and conventional, or
local and distant, don't really make a big difference globally. Small potatoes (no pun
intended) by comparison.If you want to lower greenhouse gas emissions from
agriculture focus on deforestation, reducing methane (from cattle, then rice) and the
over use of fertilizers and manure; eat less meat and avoid things linked
to deforestation.

23. "Regardless of the debate on how food is grown, isnt the real issue
about reducing food waste? If less food was grown there would be less
waste."

JF: Very good point! When we waste 30-40% of the world's food (in poor countries
and rich countries alike), we can certainly improve the availability of food in the
world by reducing waste. Compare this to the 20% improvement in global crop
yields we've seen in the last 20 years, from billions of dollars invested in plant
breeding, GMOs, technology, etc. I think reducing food waste, and rethinking
some aspects of our diets and biofuel policies, is the best possible way to improve
food supplies around the world. And yet it's the solution that gets the least
attention (and funding). We need to address this.

HT: Reducing food waste would help to reduce the environmental impacts of food
production too. In the developed world households waste about 25% of the food
 they buy. Increasing the public awareness of the negative impacts of food wasting
might help to alleviate the problem.

@plantscience 24. "How can we best promote the uptake of mixed and
integrated farming systems?"

JF: First of all, we need to realize that polarized "us versus them" debates in
agriculture are harmful, and distract us from solving bigger food and environment
problems. The debates about organic and GM crops are something of a sideshow
anyway, since only 1% of the world's food is certified organic, and only 10% is GM.
So 90% of the world's food is *neither* organic nor GM. Let's focus on solving the
bigger problems, like how we can get more healthy food with less environmental and
social harm across *all* of our agricultural systems. And let's shift our approach of
labelling with arbitrary names (e.g. "organic" or "local") to labels that indicate
performance (e.g. what nutrition is being delivered, and how many resources/what
environmental impact it took to produce it?)

@TheVeganSociety 25. "Of all greenhouse gas emissions globally caused by

the UK, what's the likely range for the fraction due to farming?"

HT: Agriculture accounts for 8.5% of the UK greenhouse gas emissions. The whole
UK food system has been estimated to account for about 20% ofthe UK emissions,
and when the emissions related to changing the use of land are included the
contribution would be about 30%.

A road cuts through pristine rainforest to give a community access to the city. A dam
creates a reservoir to provide freshwater to a growing town. A platform that is miles from
the shoreline gives access to oil reserves deep below the ocean floor.

These are all examples of infrastructurephysical structures that provide the

underpinnings for modern society. Infrastructure is a necessary part of the development
associated with a growing human population, but it can also have devastating impacts on
the environment. The road through the rainforest may fragment habitat or cut off the
migration route for an endangered species. The dam may have diverted water from
freshwater habitats already struggling through a drought. A spill from the oil platform
may have killed marine organisms and left the shoreline polluted.

Environmental concerns are not always considered during the design, planning and
construction of infrastructure projects. WWF works with governments, industry and other
leaders to encourage the consideration of sustainability in these efforts, including
examining innovative ways reduce environmental impact and protecting sensitive habitat
that may be irrevocably damaged by these projects.

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 WWF-Canon /
James Morgan
New road in Central Africa.
BROWSE PHOTOS & VIDEOSh

An artist's push to protect Alaska's

breathtaking Bristol Bay
Apayo Moore and other young leaders like Alannah Hurley, Verner Wilson, and Katherine
Carscallen have helped organize resistance to a mine that would negatively impact
Bristol Bay: through public meetings, letter-writing campaigns and demonstrations, and
testifying to all who will listen about the splendors of bay's salmon runs.

CONTINUE READINGh MORE STORIESh

Paul Colangelo / WWF-US

CAUSES
 Sarah Black / WWF-Canon
Infrastructure for transportation, energy projects and other developments that make
modern life possible can often damage and destroy natural habitats, and negatively
impact biodiversity.

ROADS AND RAILWAYS

Roads and railways are necessary to move goods and people across distances, but they
have long-lasting effects on the landscapes they cut through. They can fragment
ecosystems and halt migrating animals in their tracks. Cars and trains may kill animals in
their paths and bring noise and air pollution to previously undisturbed areas. And roads
and railways can facilitate illegal logging and hunting by opening up regions long kept
pristine by their inaccessibility.

DAMS
There are more than 45,000 large dams around the world, storing three to six times the
amount of water that is naturally contained in rivers. Most have a relatively benign
impact on their local environment, due to their design, location, or mitigation efforts.
However, some dams have far-reaching environmental impacts, contributing to the
ongoing loss in biodiversity both in the rivers themselves and in the local ecosystems.
Impacts could include reducing or blocking sediment flow, hampering fish migration,
flooding habitat, or increasing water pollution.

WATER TRANSFERS AND CHANNELIZATION

Massive engineering projects have diverted water from rivers to supply cities and irrigate
farms. But while these efforts may fill immediate needs, they can have large-scale
impacts. Even small amounts of water diversion can leave a river basin vulnerable to
drought in times of low rainfall. Wetlands may be destroyed, threats to already
vulnerable species may increase, and communities that depend on the river basin may
face consequences that include their displacement.

OIL, GAS AND MINING FACILITIES

Many environmentally sensitive areas, such as the Arctic, the Amazon and the Congo
Basin, hold rich deposits of oil, gas, metals and other valuable natural resources.
Developing the infrastructure required to extract these resources including roads, rail,
transmission lines and dams can cause severe environmental damage. This includes
the fragmentation and destruction of forests and other habitats, the interruption of
migration routes, the draining of freshwater, and the erosion or pollution of the land.

IMPACTS
 WWF-Canon / James Morgan
Infrastructure development is happening fast in Gabon, Africa. New roads pose an increased threat to
wildlife.
Ecosystems can be destroyed during the creation or installation of infrastructure such as
roads and dams, and these structures can facilitate further destruction that continues for
decades.

HABITAT DEGRADATION AND DESTRUCTION

When roads pave over forests, or dams create lakes where there once were streams,
plants and animals lose valuable habitat immediately. But that habitat destruction can
continue long after the infrastructure is first put into place if it generates pollution or
facilitates the further degradation of the landscape due to additional legal and illegal
development.

HUNTING ACCESS
Roads make it easy for people and goods to move long distances, but they also make it
easier for hunters to reach animals in remote areas. Timber companies that have built
 roads through forests in the Congo Basin, have helped to fuel the bushmeat trade in that
region and contributed to the overhunting of vulnerable species including gorillas,
elephants and leopards.

ALTERED RIVERS
More than 60% of the worlds rivers have been fragmented by dams, which can interrupt
the natural flows of waterways and disrupt the movement of sediment. This increases the
risk of floods and hampers navigation. Dams can also degrade water quality through
increased salinity, decomposition of organic matter or the leaching of mercury from the
soil, making the water unusable for drinking or irrigation. In addition, dams may prevent
migratory fish from reaching their spawning and feeding sites, contributing to the
ongoing loss of freshwater fish species.

MIGRATION ROUTES BLOCKED

Many animals migrate long and short distances to find mates, food, water and other
resources. Large animals need big spaces and lots of freedom to roam. But roads, fences,
dams and other structures can block these wildlife corridors, fragment habitat and push
species towards extinction.

INCREASED POLLUTION
Roads, dams and other infrastructure can create noise, air and water pollution that
increases as development grows. In the Alps, for example, almost 150 million people
cross the mountains every year, mostly by road. This heavy traffic contributes to
emissions of nitrogen dioxide that turns into acid rain and damages forests and other
ecosystems.

IMPACTED SPECIES & PLACES

ARCTIC

ARCTIC WOLF
 BROWN BEAR

CONGO BASIN

CROSS RIVER GORILLA

FOREST ELEPHANT

GANGES RIVER DOLPHIN

GREATER MEKONG
 INDUS RIVER DOLPHIN

IRRAWADDY DOLPHIN

MOUNTAIN GORILLA

PRONGHORN

WESTERN LOWLAND GORILLA

ARCTIC
 ARCTIC WOLF

BROWN BEAR

CONGO BASIN

CROSS RIVER GORILLA

FOREST ELEPHANT

GANGES RIVER DOLPHIN

 GREATER MEKONG

INDUS RIVER DOLPHIN

IRRAWADDY DOLPHIN

MOUNTAIN GORILLA

PRONGHORN

WESTERN LOWLAND GORILLA

 ARCTIC

ARCTIC WOLF

BROWN BEAR

CONGO BASIN

CROSS RIVER GORILLA

FOREST ELEPHANT
 GANGES RIVER DOLPHIN

GREATER MEKONG

INDUS RIVER DOLPHIN

IRRAWADDY DOLPHIN

MOUNTAIN GORILLA

PRONGHORN
 WESTERN LOWLAND GORILLA

ARCTIC

ARCTIC WOLF

BROWN BEAR

CONGO BASIN

CROSS RIVER GORILLA

 FOREST ELEPHANT

GANGES RIVER DOLPHIN

GREATER MEKONG

INDUS RIVER DOLPHIN

IRRAWADDY DOLPHIN

MOUNTAIN GORILLA
 PRONGHORN

WESTERN LOWLAND GORILLA

g
Next

WHAT WWF IS DOING

 Juan Pratginestos / WWF-Canon
Roads, dams and other infrastructure can play important roles in the economic
development of communities. The key to their environmental success lies in examining
all options, evaluating their placement in the landscape. If the project cant be avoided,
finding a path that that is economically, socially and environmentally responsible is
crucial.

ADVOCATING FOR SUSTAINABLE DAMS

Hydropower is a renewable resource, but dams can have a devastating effect on the
environment. WWF actively engages with banks and hydropower companies to ensure
broad-based improvement of practices. We encourage banks to adopt transparent
lending guidelines to ensure that investment decisions are made responsibly. And we
advise private and public sector institutions on how to improve the selection of projects
and mitigate those impacts that cannot be avoided.

INFLUENCING BETTER ROAD DESIGN AND PLANNING

 Roads can provide vital economic links for isolated communities, but they can also
contribute to environmental disasters. WWF works to influence road building at the
design and planning phases so that the impacts of these projects, both direct and
indirect, may be reduced. We do this by promoting the use of social and environmental
criteria during planning and design and advocating for national and regional policies that
incorporate sustainability concerns.

PROTECTING SENSITIVE AREAS FROM DEVELOPMENT

Some areas of the planet are simply too vulnerable to allow activities such as oil
extraction or mining. WWF identifies sensitive areas and works with governments,
industry and other leaders to protect them from development.

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IDFCs rigorous E&S policy along with its commitment to the Equator Principles (EP) serves as a solid foundation for
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Sustainable Infrastructure Development

IDFC is a thriving example of thought leadership and advocacy on sustainability for emerging economies. IDFC helps
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IDFCs alternative assets business has already emerged as the largest investor in low-
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IDFC frequently focuses on crucial and urgent issues such as land acquisition, climate
change and water through its policy advocacy initiatives.

In order to promote low carbon economy projects in India, IDFC is actively working with government agencies, other
financial institutions and industry associations like CII and FICCI on formulating innovative financing mechanism for
attracting greater private sector investment in the low carbon sector.

We have initiated the Inclusive Infrastructure Fund, a small corpus formed out of our own funds to support social
enterprises and innovative environmental projects.

The Fund made its first equity investment in Ziqitza Healthcare Ltd., a company that provides emergency response
ambulance services under an innovative business model where better-off patients cross-subsidize poorer patients.
Through this fund we have also approved a second investment in a company that imparts civil construction skills to
unemployed rural youth and places them directly with construction companies after training.

We are considering several other investment opportunities in areas such as rural solar lighting, municipal solid waste
based biomethanation plants and innovative rural community sanitation upgradation systems.

Environmental and social performance

At IDFC we firmly believe that small steps go a long way in saving the environment. IDFC's
gauges both its internal and external E&S performance.

Internal performance is gauged through resource conservation, reduction of the carbon

footprint and employee engagement in IDFCs environmental and CSR initiatives. IDFC
measured its carbon footprint for the first time in FY 11 and this will constitute the baseline
for subsequent monitoring and reduction, the ultimate objective being to make IDFC a
carbon neutral organisation. The Environmental Investment Organisation, a UK-based non-
profit organization ranked IDFC as the top Indian firm for levels of transparency related to
greenhouse gas emissions and carbon intensity. IDFCs active volunteering program is
aimed at sensitizing our employees towards environmental and social issues and is just
another small step towards preserving our planet.
Externally ERG undertakes detailed E&S due-diligence of projects under consideration and identifies project specific
environmental impacts and their corresponding risks and requisite mitigation measures.

IDFC is one of the 50 companies included in the S&P ESG India Index that measures 50 of the best performing stocks
in the Indian market as measured by environmental, social and governance parameters.

Environment policy framework

Under the "Go Green" initiative, we have launched an internal environment policy aimed at minimizing the
environmental impact and carbon footprint of our projects. We are on course for obtaining the US Green Business
Council's LEED Gold Certification (Commercial Interiors) for our new office at Chennai and (possibly India's first)
certification for an Energy-Efficient Data Centre from TUV Rhineland, Germany.

Carbon Footprint

Carbon footprint is a measure of the impact that any organisations activities have on the environment and in
particular climate change. It is expressed in tonnes of carbon dioxide (CO 2) emitted equivalent (tCO2e) and is reported
under three categories:

Scope 1: Emissions from company owned or operated GHG sources

Scope 2: Emissions from assets owned by others but energy is bought by the company
Scope 3: Emissions other than Scope 2 that are a consequence of an organisations
activities, but arise from greenhouse gas sources controlled by other organisations (non
mandatory reporting).

IDFC is committed to building a sustainable future, and, therefore, is focused on reducing

the carbon intensity of its operations. It will use ratios (tCO2e/ Operating Income & tCO2e /
PAT) to measure the incremental emissions for every rupee of revenue generated and
profit generated respectively and will endeavour in increasing its resource use efficiency in each succeeding year.

IDFC has been assessing its carbon footprint from its operations since 2011 with the aim of becoming a carbon neutral
organization in future. IDFC's Carbon footprint assessment for FY15 has been verified by SGS India Pvt. Ltd. In
accordance with ISO-14064-3:2006 as meeting the requirements of ISO-14064-1:2006 - Specification with guidance
at organization level for quantification and reporting of greenhouse gas emissions and removals & WRI/WBCSD
Greenhouse Gas Protocol A corporate Accounting and Reporting Structure. The carbon footprint for IDFC in FY15 is
as given in Table below:

FY FY %
2015 2014 Variati
on

Total tCO2e 8843 8284 6.75%

Total tCO2e /op income (in Crores) 2.18 2.22 2.01%

Total tCO2e /PAT (in Crores) 5.18 4.59 12.86%

The higher value of the overall GHG emissions is due to the increased growth and business of IDFC. However, energy
conservation measures have been undertaken at our various office premises, which includes use of double glazed
windows, minimum use of paper printings, use of recycled material, green IT, use of video conferencing to avoid air
travel, e-forms for applying in mutual fund investments, e-statements for mutual fund investors, e-annual reports, etc
in order to reduce our carbon footprint.