Agrifood Industry Struggling with Scope 3 Emission Reduction

Agrifood corporations are making headway on reducing scope 1 and 2 emissions, which arise directly from their operations, but struggle when it comes to tackling scope 3.

According to a report from non-profit sustainability advocate Ceres, indirect emissions - those coming from a company’s value chain - are much harder to manage and are slowing progress towards climate goals.

The report, titled 'Taking Stock: The State of Climate Action and Disclosure in the Food Sector', examines climate disclosures from 50 major agrifood companies, including giants like ADM, Yum Brands and Kroger.

Its aim is to provide investors with a clear understanding of the state of emissions in the food sector while offering best practices for driving improvements.

The challenge of scope 3 emissions

While 60% of the companies studied are making progress on reducing direct scope 1 and 2 emissions, the report highlights that scope 3 emissions, which can make up between 65% and 95% of a company’s total emissions, remain a significant challenge.

Ceres finds this delay unsurprising, noting that the complexity of addressing emissions across a sprawling value chain, which includes suppliers and customers, makes the task far more difficult.

The report explains: “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.”

Furthermore, Ceres points out that companies setting “robust targets” for scope 3 emissions are better positioned to reduce their overall greenhouse gas emissions than those without such targets.

“Most companies that demonstrated reductions in emissions have set validated targets aligned with 1.5°C, illustrating the importance of target-setting to internally prioritise climate action,” the report notes.

Setting targets and tracking progress

A few companies are already showing significant progress and the report highlights them as examples for the rest of the sector.

ADM, for instance, is praised for offering more granular disclosures that help pinpoint where emissions are coming from. ADM has reported that 20% of its scope 3 emissions come from non-land sources like transportation and packaging, 37% from land-use changes and 42% from agricultural activities, including fertiliser use.

McDonald’s and Hershey are recognised for focusing on reducing Forest, Land and Agriculture (FLAG) emissions, which are among the largest contributors to climate change in the food sector.

Their commitments suggest serious efforts towards addressing land-based emissions within their overall climate strategies.

Methane, a particularly potent greenhouse gas, is also a key focus for companies like General Mills, Kraft Heinz and Starbucks, all of whom have joined the Dairy Methane Action Alliance.

These companies are working to disclose methane emissions and put plans in place to reduce agricultural methane emissions in their supply chains.

Ceres also highlights that some corporations are supporting legislation that could drive wider adoption of agricultural climate solutions.

For example, Dairy Farmers of America and McDonald’s have supported the Enteric Methane Innovation Tools for Lower Emissions and Sustainable Stock Act, which was introduced earlier this year and aims to reduce methane emissions in livestock farming.

Collaboration is key

In addition to setting clear targets and providing better data, collaboration across the food sector is emerging as an essential strategy for reducing scope 3 emissions.

Ceres suggests that by pooling resources, companies can scale their impact throughout the supply chain, making progress more achievable for everyone involved.

This point is illustrated by recent news of a partnership between General Mills and Ahold Delhaize to transition shared acreage to regenerative agriculture, a practice known to reduce emissions.

These companies have also teamed up with other food sector businesses to adopt similar sustainability practices, such as Ahold Delhaize’s collaboration with Kellanova for its Cheez-It brand.

The Ceres report makes it clear that while progress is happening, much more needs to be done to tackle the complex problem of scope 3 emissions.

Agrifood companies must increase their focus on setting and achieving targets across their entire supply chains if they are to meet global climate goals and safeguard their operations against future risks.

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