Tackling the Climate Challenge: Food Giants' Struggle to Reduce Emissions

The food industry is a significant contributor to greenhouse gas emissions, with up to 40% of global emissions coming from the global food system. However, a new report from the investor advocacy group Ceres reveals that while some of the largest North American food and agriculture companies are making progress in reducing their direct operational emissions, they are struggling to make substantial cuts in their supply chain emissions, which account for the majority of their carbon footprint.

Uncovering the Complexities of Emissions Reduction in the Food Sector

Scope 1 and 2 Emissions: Incremental Progress

The Ceres report found that 23 of the 50 food companies it tracks were able to reduce their Scope 1 (direct operations) and Scope 2 (energy use) emissions over the past two years. This progress is largely due to companies' ability to take concrete steps, such as switching to renewable energy or implementing more energy-efficient production processes, to lower their direct emissions.

Scope 3 Emissions: The Elusive Challenge

However, the real challenge lies in tackling Scope 3 emissions, which account for around 90% of a food company's overall emissions. These emissions come from the company's supply chain, including the farmers and producers who grow the crops and raise the livestock that the companies rely on for their final products. Factors such as deforestation, land-use change, and the carbon-intensive nature of certain commodities like meat make reducing Scope 3 emissions particularly difficult.

The Importance of Setting Targets

The Ceres report found that the companies that were able to lower their Scope 3 emissions were those that had set specific goals and targets for doing so. "If you don't have a target and don't know what you're aiming for, you're much less likely to be heading in the right direction," said Meryl Richards, a program director at Ceres.

Highlighting Leaders and Laggards

The report highlighted a handful of companies that have set targets to reduce their Scope 3 emissions, including Kraft Heinz, McDonald's, Hershey, General Mills, and Starbucks. However, the majority of the 50 companies analyzed were found to be failing to make substantial progress in this area.

The Dual Challenge of Emissions Reduction and Climate Resilience

The food and agriculture sector faces a unique challenge in that it is both a significant contributor to climate change and highly vulnerable to its impacts. As weather extremes continue to batter farm and livestock systems, the industry must not only reduce its emissions but also adapt to the changing climate.

Regulatory Pressure and Investor Scrutiny

The report notes that new regulations, such as the U.S. Securities and Exchange Commission's recently finalized rules requiring companies to disclose their climate risk, will put increasing pressure on food and agriculture-based companies to shrink their carbon footprints. Investors and other stakeholders are also demanding more transparency and action on emissions reduction.

The Urgency of Addressing Food Sector Emissions

The Ceres report underscores the critical importance of the food and agriculture sector addressing its emissions, as it is a major contributor to global greenhouse gas emissions. "We have to reduce emissions from this sector if we're going to have any chance of limiting warming to 1.5, or even 2 or even 2.5 or 3 degrees," said Richards. Failure to do so will not only exacerbate the climate crisis but also threaten the long-term viability of the industry itself.