- Targeting carbon emissions in food production needed as demand for meat products in China and India threatens to increase the amount of greenhouse gases the sector produces.
This is an opinion piece; the views expressed are the author’s own. You can share your thoughts on this piece by sending them to Karma editors at hello@karmaimpact.com.
Food production accounts for over a quarter of the world’s greenhouse gas emissions, Science reported in 2018. Nearly a third of these emissions, or 31%, come directly from livestock and fisheries. With the global population soaring and developing countries such as China and India driving up demand for meat products, the need to address emissions produced by this sector will only intensify.
Scope 3 target-setting is a crucial step to prevent irreversible damage.
For food retailers and manufacturers, the majority of their emissions actually arise upstream or downstream of their direct operations. According to the Climate Disclosure Project, the average company’s Scope 3 emissions — the indirect emissions sources within value chains — are 5.5 times greater than their Scope 1 and 2 emissions combined. Therefore, addressing Scope 3 emissions offers one of the most significant reduction opportunities.
The Science Based Targets initiative (SBTi) is the current benchmark for Scope 3 target-setting. To have a target approved by the SBTi, a company must formally commit to the process, selecting baseline and target years for assessment. Targets are usually presented as a percentage reduction.
Disclosure of targets needed
Despite the buzz surrounding Scope 3 targets, there is a lack of disclosure that must be addressed. Disclosure is necessary for investors to understand how ambitious individual company targets are. Some level of ambition can be judged by comparing percentage targets over their duration, which is the most common level of disclosure for companies. However, this is a two-dimensional approach. It suggests that a target follows a linear trajectory, but for many companies they may actually increase their emissions some years. For example, General Mills revised their baseline year emissions up after acquiring Blue Buffalo, their pet business.
Other gaps include how much carbon dioxide a company produces, and how a company sets and intends to meet their target. Investors need a comprehensive overview of whether companies are addressing the most important aspects of their value chains, and for the majority of food companies this means addressing their protein supply chains.
Therefore, FAIRR defines an ambitious target as one that is science-based and approved by the SBTi, includes animal agriculture and is fully and publicly disclosed.
State of the industry
As part of their new Sustainable Proteins Hub, FAIRR ranked the world’s 25 largest food retailers and manufacturers according to the ambitiousness of their Scope 3 targets. 19 companies have, or are in the process of setting Scope 3 targets, but General Mills, Nestle and Groupe Casino are the only companies to disclose the amount of CO2 produced throughout their value chain.
There is greater progress when it comes to the inclusion of animal agriculture. 13 out of 25 companies have or will include this in their targets. General Mills, and most recently Ahold Delhaize have also disclosed the breakdown of animal agriculture in their emissions. For the former, 52% of emissions come from agriculture, with meat and dairy representing 15% and 21% respectively. For Ahold Delhaize, 38% of their Scope 3 emissions come from meat, fish, dairy and eggs.
U.S. companies are among the worst performers when it comes to ambitious Scope 3 targets. Only two companies, Walmart and General Mills have targets approved by the SBTi and three out of the six companies without targets are American (Amazon, Costco and Kroger).
FAIRR’s engagement has highlighted the need for greater disclosure of targets. If we are to reduce greenhouse gas emissions in line with a 1.5-degree scenario under the Paris Agreement, we need ambitious action, not just ambitious target-setting.
Philippa Thornton is an ESG analyst at the FAIRR Initiative, working with its Sustainable Proteins team. She has previously worked with environmental NGOs. Follow FAIRR at @FAIRRInitiative.
