Circular Economy Collaboration & Co-Creation

Food Companies:
The Most Impactful Scope 3 Emissions Solutions Have Multiple Benefits

Working towards halving food loss and waste by 2030 will help food and beverage companies mitigate their GHGs across all scopes. Supply chain collaborations and engagements that yield multiple environmental benefits are critical.

Sponsored Content | / This article is sponsored by Vanguard Renewables | By David Darr | Published 1 year ago | About a 6 minute read

Image: Frida Flowers Xtradry

As we close out Earth Month, it seems only fitting to discuss one of the most complicated issues with greenhouse gas accounting in our nation’s food and beverage supply chains — Scope 3 emissions and the potential solutions.

For the past 43 years, we have celebrated Earth Day on April 22; and as the climate crisis continues to grow, it has become a month-long global appeal during which we ask our world leaders, businesses, scientists and every one of us to do more and demand that we do better for our home.

One way to help mitigate the climate crisis is by addressing our Scope 3 emissions with solutions that have multiple environmental benefits.

The challenge: Understanding Scope 3 emissions

The call for corporations to lessen their environmental impact through greenhouse gas (GHG) emissions reductions continues to grow louder. In 2021, scientists found that the concentration of CO₂ in the planet's atmosphere is at the highest number in human history at 416 parts per million. Global leaders and consumers alike are stating the importance of emissions reductions through both legislation and the marketplace. Faced with new guidelines, and to meet their companies’ corporate sustainability goals, businesses are turning to carbon reporting to identify and measure where emissions occur — increasing the focus on indirect emissions that occur in company supply chains.

The GHG Protocol, introduced in 2001, is a widely used standard for sustainability reporting. It distinguishes an entity’s indirect and direct emissions into three scopes: Scope 1 (direct use of energy — ex: natural gas, diesel fuel, gasoline) and 2 (indirect use of energy — ex: electricity) are the emissions that are owned or purchased by an entity. Due to the direct ownership of and control over scope 1 and 2 emissions, they are easier to identify and quantify — often making them part of a company’s primary reduction goals. On the other hand, Scope 3 emissions are indirect emissions from the company’s activities throughout its supply chain — including suppliers and consumers. As a result, Scope 3 emissions are the largest portion of emissions, and are hardest to account for and reduce.

Scope 3 emissions often account for more than 70 percent of total carbon emissions for many businesses; so, it is of the utmost importance for companies to assess and address them. For instance, a company can design products meant to be composted or recycled after use to improve use and end-use emissions. But an unaware consumer may dispose of the product in the garbage, thereby defeating the company's sustainability efforts and the materials’ intended use. A company’s efforts to tackle its Scope 3 emissions need to involve its existing suppliers and customers, necessitating education with every person that is part of its value chain.

The role of the food and beverage industry in addressing Scope 3 emissions

Like other industries, food and beverage value chains have significant Scope 3 emissions. Every year, approximately one-third of the edible food created is lost or wasted. Once food reaches the landfill, all the processes involved in its production, transportation, storage and more are also wasted. Operations involved with the value chain and the decomposition of food in the landfill generate harmful GHGs.

The problem is so dire that the food and beverage industry are being called upon by both national and global bodies to halve food loss and waste by 2030. With the help of programs such as the USDA’s Greenhouse Gas Accounting and Mitigation initiative, the US EPA’s GHG Inventory Development program and United Nations’ Sustainable Development Goal 12, companies can find the guidance they need to achieve this goal. Additionally, working towards halving food loss and waste will help food and beverage companies mitigate their GHGs across all scopes.

It’s a daunting task, but there are solutions.

A Farm Powered® solution

In the shift to redirect organic waste from landfills and incineration, Vanguard Renewables’ anaerobic digestion and organics recycling areas provide a solution to our national food-waste problem while displacing fossil fuels with renewable energy. Vanguard Renewables combines food waste from food and beverage manufacturers and manure from multi-generational dairy farms in a Farm Powered anaerobic digester — which convert the sugars, fats and other compounds into biogas. This biogas is captured, cleaned to renewable natural gas (RNG) standards, and converted into renewable energy and low-carbon fertilizer for crop applications.

Sequestering organic food and beverage waste and cow manure captures as much as 95 percent of the potential GHGs that would result if the waste was sent to a landfill, or if the farm manure was stored long-term in lagoons. Recycling food waste allows companies to offset emissions from unowned or unoperated parts of their value chain.

Food and beverage companies leading the way

Multinational brewer AB InBev is a striving to achieve net-zero emissions across its value chain by 2040. To achieve this, the company developed a timeline aligned with the Paris Agreement’s 1.5° pathway to ensure that its sustainability goals — including eliminating 25 percent of all scope 1-3 emissions by 2025 — stay on track. Through a study conducted in 2021, AB InBev estimated that Scope 3 emissions represented 85 percent of their total footprint, leading it to engage with value chain partners ranging from suppliers to farmers to collaborate on solutions that reduce GHG emissions, promote regenerative-agriculture practices, and improve climate resilience.

In another example, in 2020 Smithfield Foods announced a 2030 goal to achieve carbon negativity and a 25 percent emissions reduction across scopes 1-3 by 2025. The company’s emissions-reduction goal coincides with its commitment to halve food loss and waste by 2030 as a member of Champions 12.3. Smithfield Foods sees renewable energy as key to achieving its carbon-reduction goals; it has targeted obtaining 50 percent of electricity needs from renewable resources by 2030. Much like Vanguard Renewables, Smithfield is committed to improving the lives of farmers throughout its supply chain by implementing sustainable business and farming practices. In 2022, the company joined the Farm Powered Strategic Alliance (FPSA) — launched in 2020 by Vanguard, Starbucks, Dairy Farmers of America and Unilever — which brings together major food and beverage manufacturers to boost food waste reduction and recycling and expand renewable energy production across the US.

Closing thoughts

No business can tackle its GHG footprint alone; companies must provide leadership in engagement toward sustainable solutions. But no matter the size of a company, every business has a responsibility to track and reduce its GHG emissions. Enacting sustainable solutions requires cooperation and collaboration between all entities in a company’s value chain. Pre-competitive, cross-industry alliances such as the FPSA are a great tool to engage in real solutions and collaborate with like-minded businesses also determined to meet sustainability goals. But external best practices need to be adapted into companies’ internal business models; food companies can succeed by helping all members of their supply chain to make sustainable improvements.

With the irreversible effects of climate change looming, tackling the enormous amount of Scope 3 emissions in the food value chain and beyond is a daunting task. However, supply chain collaborations and engagements that yield impactful results are critical.

David Darr

Chief Sustainability Officer
Vanguard Renewables

David Darr is Chief Sustainability Officer at Vanguard Renewables. He has over 20 years of experience working with dairy farmers around the country to implement sustainable and regenerative farming practices. Most recently, Darr served as the SVP and Chief Strategy and Sustainability Officer for the Dairy Farmers of America. He holds both a BS and MS in Agriculture Economics from Ohio State University, and an MBA from Rockhurst University.

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