Biggest food producers ‘failing to tackle supply chain impacts’

Charles Wark • 2degrees • Community manager • Article • 11 hours ago

Some of the biggest food, drink and tobacco brands in the world are missing their biggest opportunity to mitigate climate risks, according to new analysis by CDP.

In a new report, ‘The forgotten 10%: Climate mitigation in agricultural supply chains’ the organisation looks at how some of the most recognizable household brands are managing climate change.

The agricultural sector is a major contributor to climate change, coming just behind the energy sector in its impact on global emissions.

It draws on data collected by 97 food, beverage and tobacco firms on behalf of 822 institutional investors that represent over a third of the world’s invested capital.

The biggest source of food-related greenhouse gas (GHG) emissions occur before produce leaves the farm gate, i.e. in the agricultural production portion of producer’s supply chains.

Yet less than a quarter of the major brands that disclosed to CDP this year reported their indirect GHG emissions from agricultural production.

With emissions from agricultural production responsible for 10-14% of global GHG emissions, the lack of data from companies on this area suggests that at least 10% of global emissions are being unaccounted for.

“Companies in this sector must widen their focus beyond their direct operations to realize the significant opportunities from working with suppliers to cut emissions,” says the CDP.

“There is clear business imperative for these companies to act.”

More than a third of the 97 brands disclosing to CDP report lower costs from implementing climate change-related agricultural management practices. And well over three quarters of the reported climate-linked agricultural practices resulted in two or more benefits for farms and their suppliers, such as soil quality improvements, water savings and yield increases.

The agricultural sector is a major contributor to climate change, coming just behind the energy sector in its impact on global emissions.

It is also one of the most at risk, with more than 90% of companies telling CDP that their business is vulnerable to physical climate change impacts.

“Collaboration with stakeholders holds the key for brands seeking to unlock opportunities to become resilient to climate change,” says Frances Way, the CDP’s co-chief operating officer. “Our data shows that companies who engage with one or more of their stakeholders are more than twice as likely to see returns from emissions reduction investments as companies that don’t.”

Coca-Cola HBC AG, Dairy Crest Group, Danone, Kellogg Company, Nestle and Unilever are identified as being ahead of the pack for their approach to climate mitigation in their agricultural supply chains.

“These companies have not only disclosed their agricultural emissions over the past two years, they have also reported on implementing agricultural management practices with climate change-related benefits,” says CDP.