Agrifood corporates are making some progress on reducing scope 1 and 2 emissions but lagging when it comes to scope 3, according to a new report from sustainability advocate and nonprofit Ceres.
“Taking stock: the state of climate action and disclosure in the food sector” examines the climate disclosures of 50 major agrifood corporates with the aim to “provide investors with clarity around the numbers and lay out best practices companies can take to drive progress forward.”
The research is tied to Ceres’ Food Emissions 50 initiative, which started in 2021 and tracks companies’ climate disclosures and progress. The list of companies includes agrifood giants like ADM, restaurant groups including Yum Brands and Domino’s, and grocery retailers Kroger and Albertson’s, among others.
Of these companies, 60% are making progress on scope 1 and scope 2 emissions, which are emissions that come from their direct operations.
The importance of setting targets
That Ceres sees “slower progress on addressing scope 3 emissions” is not surprising; struggles to adequately address scope 3 are well documented in the agrifood industry and beyond. According to the Science Based Targets initiative, scope three can account for 65% to 95% of a company’s overall emissions.
But as Ceres’ new report notes, scope 3 emissions — that is, indirect emissions from a company’s value chain — can be more difficult for companies to manage, as companies must rely on their direct and indirect suppliers as well as customers to take actions to reduce these emissions.”
Without action on scope 3, companies “will be unable to achieve total GHG emissions reductions in line with a 1.5°C future and may be exposed to risks related to weakened supply chain resilience to a changing climate,” the report continues.
Companies that set “robust targets that include scope 3 emissions” have a greater likelihood of reducing their emissions compared to those that do not have targets, notes the report.
“Most companies that demonstrated reductions in emissions have set validated targets aligned with 1.5°C, illustrating the importance of target-setting to internally prioritize climate action.
How companies can take action
The report highlights a handful of companies currently demonstrating different ways in which corporates can reduce total GHG emissions.
ADM is showing “increasing granularity in emissions disclosures,” which Ceres says can help companies pinpoint where to most effectively cut emissions.
For example, “ADM has specified that 20% of its scope 3 emissions are from non-land-based emissions such as transportation and packaging, 37% are from land use change, and 42% are from other agricultural emissions such as those associated with fertilizer use. ”
Forest, Land, and Agriculture (FLAG) emissions are a category of greenhouse gas emissions and are the “largest drivers of food sector climate impact,” according to Ceres.
The report calls out McDonald’s and Hershey for their commitments to reducing FLAG emissions “signaling serious and concentrated integration of efforts to address land-based emissions as a part of broader climate action.”
For other companies, methane is a major driver of total GHG emissions. Here General Mills, Kraft Heinz, and Starbucks have joined the Dairy Methane Action Alliance and have committed to disclosing their methane emissions and specific plans to reduce agricultural methane emissions in their supply chains.
Some corporates are also supporting legislation that could lead to broader adoption of solutions for agriculture and climate change. Ceres specifically cites Dairy Farmers of America and McDonald in supporting the Enteric Methane Innovation Tools for Lower Emissions and Sustainable Stock Act, a piece of legislation introduced earlier this year.
Collaboration is a word that comes up a lot lately in climate discussions, and Ceres says it can “accelerate scope 3 emissions reductions by pooling investments to help scale the impact along the supply chain.”
Case in point: this week’s news of General Mills and Ahold Delhaize partnering to transition shared acreage to regenerative agriculture practices, which can reduce emissions. Both companies have similar partnerships with other agrifood corporates, including Ahold Delhaize’s collaboration with Kellanova for its cheese it brand.
