A new report from sustainability advocate Ceres has shed light on the climate action efforts of major agrifood corporations, revealing a mixed bag of progress. While many companies are making strides to reduce their scope 1 and 2 emissions—those directly tied to their operations—there is a notable lag in addressing scope 3 emissions, which encompass indirect emissions throughout their value chains. This critical distinction is outlined in Ceres’ report titled “Taking stock: the state of climate action and disclosure in the food sector,” which evaluates the climate disclosures of 50 leading agrifood companies, including industry giants like ADM, Yum Brands, and Kroger.
According to the report, approximately 60% of the companies assessed are successfully reducing their scope 1 and 2 emissions. These emissions typically arise from on-site energy use and company-owned vehicles. However, the report highlights a significant challenge: scope 3 emissions, which can account for a staggering 65% to 95% of a company’s total greenhouse gas emissions, are proving more difficult to tackle. This is largely due to the necessity of collaboration with suppliers and customers, as companies cannot unilaterally control these emissions. Ceres warns that without effective strategies to manage scope 3 emissions, companies risk falling short of the greenhouse gas reduction targets aligned with limiting global warming to 1.5°C.
The report emphasizes that companies with robust targets that include scope 3 emissions are more likely to achieve meaningful reductions. It notes that those who have set validated targets in line with the 1.5°C framework are demonstrating tangible progress, underscoring the importance of target-setting as a mechanism to prioritize climate action internally.
Ceres’ findings also spotlight several companies that are leading the charge in emissions reduction strategies. ADM, for instance, is praised for its detailed emissions disclosures, which allow for more precise identification of areas where emissions can be cut. The company has broken down its scope 3 emissions, revealing that 20% stem from non-land-based sources like transportation and packaging, while 37% are linked to land use changes, and 42% arise from agricultural practices, particularly those involving fertilizer use. This level of granularity in emissions reporting is critical for pinpointing effective interventions.
The report also highlights the significance of addressing Forest, Land, and Agriculture (FLAG) emissions, which are identified as the largest contributors to the food sector’s climate impact. Companies like McDonald’s and Hershey are recognized for their commitments to mitigating FLAG emissions, demonstrating a comprehensive approach to climate action that integrates land-based emission considerations.
In addition, the report notes that methane emissions are a significant concern for many agrifood companies. General Mills, Kraft Heinz, and Starbucks have joined the Dairy Methane Action Alliance, committing to disclose their methane emissions and outline specific reduction plans within their supply chains. This collaborative approach not only enhances transparency but also fosters accountability among industry players.
Legislative support is also a vital component of the climate action landscape. Ceres highlights the involvement of Dairy Farmers of America and McDonald’s in backing the Enteric Methane Innovation Tools for Lower Emissions and Sustainable Stock Act, which aims to promote innovative solutions for reducing agricultural methane emissions.
Collaboration emerges as a recurring theme in the report, with Ceres advocating for collective efforts to accelerate scope 3 emissions reductions. A recent partnership between General Mills and Ahold Delhaize exemplifies this strategy, as both companies work to transition shared agricultural land to regenerative practices that can help lower emissions. Such collaborations reflect a growing recognition within the agrifood sector that tackling climate change requires joint investment and innovation across the supply chain.
As the agrifood industry grapples with the complexities of climate action, Ceres’ report serves as a critical resource for investors and stakeholders seeking clarity on corporate climate disclosures and best practices. The findings underscore the urgent need for comprehensive strategies that encompass all emissions scopes, particularly scope 3, if the industry is to meet its climate commitments and enhance resilience against the impacts of a changing climate.