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Supply Chain
When it Comes to Climate Change, Holiday Feasts Are Mostly a Mystery

This year’s holiday feasts will feature a bounty of meats, vegetables and other foods, many that people don’t know are big contributors to global warming.

But if you’re looking for details on food providers’ carbon footprints to make your meals more sustainable, you’re mostly out of luck.

A recent survey conducted by Ceres found that 86 percent of food companies’ carbon footprints come from purchasing raw materials and services used to make the food — in other words, agriculture and meat supply chains. However, only 15 of the top 50 food companies in the US and Canada publicly disclose greenhouse gas (GHG) emissions from agriculture production. And fewer still — only eight — have set targets to reduce these indirect emissions, formally called Scope 3 emissions.

This means that a significant source of global warming pollution — the agriculture sector produces nearly one-quarter of the world’s GHG emissions — is not being measured and accounted for. And that makes it all but impossible for food companies to reduce these emissions.

Reported Scope 3 emissions from the 15 major food companies that disclosed last year totaled about 629.9 million tons of carbon dioxide, which is equivalent to annual CO2 emissions from 156 coal-fired power plants. Most of these emissions are from agricultural practices such as fertilizer use; and land-use impacts such as deforestation, which release carbon into the atmosphere.

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Measuring carbon emissions across an entire company supply chain is by no means easy. It’s especially challenging for food companies.

Most large food companies buy their agricultural products through a complex web of farmers, commodity aggregators and traders. Emissions from farming practices and deforestation impacts are rarely under their direct control, and farmers and traders don’t regularly collect such emissions data. Different geographies and widely varying growing practices further compound these disclosure challenges.

But industry shifts and reporting improvements are removing these barriers, making such disclosures easier and more accurate.

Several leading food companies are leveraging their massive buying power to bring commodity suppliers to the table to establish more robust GHG monitoring and accounting systems.

Measure the Chain: Tools for Assessing GHG Emissions in Agricultural Supply Chains, a new report published by Ceres and the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS), outlines methods and tools companies can use to calculate and disclose their Scope 3 carbon emissions.

The report differentiates among standards, protocols, guidance and publications for estimating emissions and emission reductions from agriculture. For example, companies that want to document carbon sequestration and the influence of environmental factors on agricultural emissions can go to the GHG Protocol Agricultural Guidance. Companies looking to calculate emissions from land use and land-use changes for agriculture and forest commodities are directed to the 2018 Land Use Change Guidance.

The report also reviews common online tools and calculators that can be used to estimate emissions, emission reductions and changes in carbon stock in food supply chains.

Traceability systems, already critical in ensuring product quality, food safety and other supply chain risks, also improve the ease and accuracy of disclosing Scope 3 emissions.

Given these advances, there is a growing expectation from global investors that food companies fully disclose Scope 3 greenhouse gas emissions. Companies should be prepared to discuss the breadth and quality of Scope 3 disclosures, including estimation methods that were used, land use factors that were considered and other issues.

The next step is for companies to set ambitious emission reduction targets, as General Mills, Mars and a half-dozen other companies have already done. More than ever, investors view climate change mitigation planning as a business fundamental. And these efforts need to include agricultural supply chain risks, including litigation, market, operational, regulatory and reputational risks.

And this is what we all want: knowing that the carbon footprint of our holiday meal is helping — not hindering — global efforts towards a sustainable, low-carbon future.