Detailed disclosure is critical in climate action plans. An emissions-reduction target is insufficient without baseline emissions data to compare it to; because investors and stakeholders have no way of knowing if major sources of emissions are going unmeasured, undisclosed and unaddressed.
The most recent IPCC report gave a dire warning: Either dramatically reduce emissions immediately or experience unprecedented threats to ecosystems, economies and communities. These threats are already playing out in the global food economy, which according to the report is experiencing a significant reduction in food production from pre-climate change levels.
The food system is not just under threat from climate change — it contributes to it, as well: A third of global greenhouse gas emissions comes from the food sector. In order to avoid the future described by the IPCC report, food companies need to increase the ambition of their greenhouse gas emission reductions.
There have been encouraging recent moves from food companies: Over the past six months, big names including Bunge, Smuckers and RBI have come out with plans that hit many of the marks that advocates say are necessary to curb the worst effects of climate change. But new research from Ceres shows that these high-profile commitments don’t paint an accurate picture of the ambition of the sector as a whole.
New benchmark data from Food Emissions 50 — an investor initiative engaging 50 of the top carbon-emitting food companies in North America on climate action — found that over half of the companies on the list have not disclosed or set greenhouse gas reduction targets that cover the full scope of their emissions. And out of the 23 companies that did disclose the full scope of their emissions in their supply chains, only four specify the amount that comes from deforestation and agriculture.
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According to the benchmark data, the ambition of climate action varies wildly across the different food industry subsectors. Some packaged foods companies are performing well, such as Hershey — which discloses a breakdown of all emissions in its entire supply chain, including those from agriculture and farming. While companies in the supercenters and hypermarkets sector are not scoring well in the benchmark, Walmart stands out as a company with a long and complex supply chain that is working closely with suppliers to help them set their own emission-reduction targets. Regular grocery stores are bringing up the rear, with none of the seven companies benchmarked fully disclosing supply chain emissions or setting emission-reduction targets.
Detailed disclosure is a critical piece of climate action plans. Without it, it is impossible to know exactly which emissions a company is counting. With food companies, it’s particularly important to know whether deforestation and particularly agriculture — the biggest source of emissions for most food companies — is excluded from targets. That allows emissions to go unmeasured, undisclosed, and unaddressed.
Incomplete disclosures can also lead to opaque commitments. A target to reduce emissions by a certain percentage is insufficient without baseline emissions data to compare it to, because investors and stakeholders then have no way of knowing if the proposed reduction is significant enough to make a difference. If emissions disclosures are incomplete, they could be vastly underreported.
For example: this year, Chipotle set an emissions-reduction target inclusive of scope 3 emissions, but it has not disclosed its baseline scope 3 emissions. Pilgrim’s Pride and JBS USA are both held to the net-zero commitment of their parent company, JBS; but neither have set reduction targets or disclosed their own scope 3 emissions. The same is true for Sysco, which has a general emissions target but no scope 3 disclosure.
Investors are ratcheting up their scrutiny of food companies’ disclosure along with targets. According to Ceres data, over 100 resolutions seeking emissions disclosure and target setting were filed last year — several of them for food and beverage companies. This year is shaping up to be the same: A resolution was submitted in January by investor Green Century for Costco, one of the companies on the Food Emissions 50 list that has not set targets or disclosed emissions.
Investors notice this lack of transparency. For targets to be credible, companies need to share how they established an emissions baseline and developed the emissions-reduction targets. If companies are not disclosing full scope emissions, investors will not have confidence in the company achieving their targets. Now more than ever, food companies need to show their work.