A report released today by sustainability nonprofit Ceres reveals that few
companies in the US food sector have disclosed their climate transition
strategies or concrete actions to achieve them, despite increasing investor
pressures and the growing threats of climate change.
The Investor Guide to Climate Transition Plans in the US Food Sector provides
comprehensive guidance to help food companies move beyond target-setting to
creating and implementing sector-specific climate transition plans that chart
pathways to greenhouse gas (GHG) emissions reductions. It outlines how, despite
greater corporate climate disclosure and commitments to GHG emissions-reduction
targets, net-zero targets and other climate-related goals, many companies fail
to adequately disclose sufficient information to
investors
on how they intend to achieve said ambitions. The quality of consistent
disclosure currently varies greatly, due to the high-level nature of existing
guidance and a lack of clear consensus on what climate transition plans should
include, leading to a clear transition-disclosure gap.
The report also includes in-depth analyses of key food sector sub-industries
such as packaged foods and meats, food distribution, food retail and
hypermarkets/supercenters and restaurants. It contains a framework to help
investors assess corporate climate transition plans in this sector, including
guidance on evaluating corporate emissions disclosure, emissions reduction
targets and climate transition strategies and actions.
“The food sector is a critical player in the transition to a net-zero emissions
economy, but the sector as a whole has been slow to translate emissions
reductions targets into action,” said Julie Nash, senior program director
for Food and Forests at Ceres. “There is no one-size-fits-all approach to
climate transition plans, but this new Ceres report offers the support and
context needed by companies and investors alike to move into the next phase of
corporate climate stewardship. As momentum grows to standardize climate-related
disclosures, such as the proposed
rule
from the SEC, it’s in everyone’s best interest to get ahead on disclosure and
action planning.”
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The food sector displays a continued lack of
progress
when it comes to climate commitment disclosure. As of January 2022, only 21 of
the 50 highest greenhouse gas-emitting North American food companies tracked by
Ceres’ Food Emissions 50
initiative have set any
short-term emissions reduction targets inclusive of scope 3
emissions —
the largest source of emissions in this sector; and none has published a climate
transition plan. The IPCC recently
outlined
how global temperature rise will negatively affect the global economy, food
security and both human and planetary health; and the global food system is
responsible for approximately a
third of global emissions.
The report is primarily intended to support investor engagements with companies
that have already disclosed their full-scope GHG emissions and have set 1.5°C
emissions-reduction targets that cover Scope 3 emissions; without these
foundational elements in place, companies face the risk of creating plans that
are not ambitious enough to truly mitigate climate
change.
Investors can also use the guidance to engage companies by emphasizing the
importance of getting ahead of forthcoming guidance and standards by
preemptively aligning their actions with more ambitious standards.
The report was developed with input from investor signatories of Food
Emissions
50, as well as food companies and an expert advisory committee. Food
Emissions 50 is Ceres’ strategy for reducing emissions in the food sector as
part of its Ambition 2030
initiative — a broader effort to
decarbonize six of the highest-emitting sectors in the US by the end of the
decade. Investor signatories to Food Emissions 50 seek to move companies to
improve their GHG emissions disclosures, set ambitious emission-reduction
targets, and implement ambitious climate transition action plans in line with
the Paris Agreement.
“As investors wake up to the economic impacts of climate change and treat
corporate climate strategies with increasing scrutiny, food companies will need
to develop tailored plans that inform business decisions at every level of
operations,” said Kate Monahan, a Director of Shareholder Advocacy at
Trillium Asset Management. “Companies and investors are actively seeking
support and guidance on how to move into the next phase of corporate
stewardship. The recommendations contained within this report will help
investors — and in turn, the companies in which we invest — create measurable
targets against which progress can be tracked and assessed.”
Forthcoming research through the Ceres Ambition 2030 initiative will provide
further guidance on climate transition plans for other priority high-emitting
sectors.
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Sustainable Brands Staff
Published May 24, 2022 2pm EDT / 11am PDT / 7pm BST / 8pm CEST