Our New Three-Part Series Food Matters: The Agriculture Sector’s Urgent Climate Challenge
Emissions reductions cannot be discussed without addressing the agriculture and food sector. Arguably the oldest industry on Earth, agriculture has undergone tremendous change in the last 50 years — from innovations in farming practices to the rising volumes needed for a growing population, as well as the escalating impact it has on the environment and climate. In our three-part series, Food Matters: The Agriculture Sector’s Urgent Climate Challenge, we explore these critical issues and offer actionable steps for businesses looking for a sustainable way forward. The series is co-authored by Sam Nunn, who leads RESET’s commercial strategy, and Joe Poon, RESET’s subject matter expert in agriculture.
Tackling emissions in the agriculture and food sector is critical to keeping the planet on a 1.5°C global warming pathway. The sector is deeply embedded in daily life, impacting every person on the planet multiple times per day. It makes up between 10% to 20% of global greenhouse gas emissions, and is the fourth most emissions intensive industry per capita on earth, behind electricity generation, transportation and construction. What sets the agricultural industry apart from other sectors, however, is its sheer scale, diversity of products it generates, and the complexity of its value chains. In this first article of the series, we will look at the emission sources for various stakeholders and present key reduction opportunities for each of the profiles.
Who are the main players? Understanding the key stakeholders in agriculture and food
The agriculture and food sector can be divided into a few key stakeholder groups. Retailers are at the top of the value chain, followed by food and beverage outlets like restaurants and hotels, which, to a lesser extent, also play a significant role. These entities distribute food to the end consumer, either for home cooking or to consume ready-made. Retailers source their stock either directly from food manufacturers — who may specialize in certain ingredients or ready-to-eat (RTE) goods, such as canned and packaged foods — or distributors of fresh ingredients such as meat and vegetables.
Scope 3 represent lion’s share of emissions
Distributors or food manufacturers typically maintain large supply networks, purchasing large quantities from farms or agricultural commodity dealers. Although onsite energy consumption (such as refrigeration or process equipment ) accounts toward some scope 1 and 2 emissions, the lion’s share comes from the farms; up to 90% of their overall emissions comes from scope 3.
Changemakers in the sector should closely examine commodity emissions
For stakeholders keen to reduce their carbon emissions, it’s often useful to take a commodity view. This is because there are a few key commodities which contribute significantly to high emissions due to their growing methods and the sheer volume in which they are produced. Beef and dairy serve as prime examples due to the significant methane emissions produced during the animals’ digestion process. Rice is also highly emissions-intensive, especially in Asia where it’s the staple crop for the majority of the population. Companies should also look at soy production, as farming is done on an enormous scale, with high fertilizer utilization, and often on deforested land. Due to its heavy use as a staple within animal feed, reducing emissions in soy supply chains can have a significant effect on scope 3 reduction — both for companies using the beans directly, and those using them as animal feed.
What’s in a name? Categorizing Forestry, Land and Agricultural (FLAG) emissions
Scope 3 emissions can be split further into Forestry, Land and Agricultural (FLAG) emissions, and non-FLAG emissions, introducing further complexity into the accounting. FLAG emissions are defined as those where agricultural practices have directly affected land use , such as growing food on deforested land, contributing to soil degradation through monoculture farming, or incurring land-related activities like the use of fertilisers and farm machinery. Non-FLAG emissions are defined as all remaining emissions, including those from food processing in factories and transportation.
Managing Scope 3: Agriculture and food sector’s top 3 challenges
For a retailer, restaurant or food brand trying to manage scope 3 emissions, there are three key challenges in terms of achieving transparency in the supply chain:
- Accounting and Transparency: Agricultural supply chains are highly regionally specific. Due to local farming methods, fertilizers, and weather conditions, the GHG emissions from the same product grown in two different locations may vary widely.
- Supply Chain Visibility: Given that there are multiple layers to the supply chain, and food products bought from distributors are often not traceable back to the farm level, it can be extremely difficult for end buyers to intervene in growing methods.
- Diversity of Product Lines: For retailers or food manufacturers, it is very common to sell hundreds of different line items, each with a long ingredients list of its own. Deciding where to focus interventions to make emissions reductions is often a challenge.
Action needed now to ensure long-term food system stability
It’s clear that managing emissions in the agriculture and food sectors is complex, but critical; food production needs to scale to ensure adequate supply for a growing population, especially as climate change brings more instability in crop yields. At the same time, emissions must be reduced to ensure a sustainable agricultural system for the long term. Although challenging, food retailers and brands can be in the driver’s seat when it comes to spearheading change. In the upcoming articles of our series, we will explore actionable steps for doing so.
Connect with our subject matter experts to explore innovative solutions and pave the way for a more sustainable approach to the agriculture and food sector.