Enviros zero in on supply chains to curb GHGs

Source: Niina Heikkinen, E&E reporter • Posted: Thursday, June 30, 2016

The food we eat is having a huge impact on the global climate, and green groups are urging the world’s largest food and beverage companies to take the lead by stemming their supply chain emissions.

Agriculture accounts for roughly a quarter of global greenhouse gases, making tackling emissions from the sector an important part of meeting the Paris Agreement goal of keeping global temperatures “well below” a 2-degree-Celsius rise from preindustrial levels, said Aditi Sen, Oxfam America’s senior policy adviser for climate change.

“Without the food sector stepping up, the Paris goal is not reachable,” said Sen, who contributed to a new briefing paper commissioned by Oxfam.

“Now we really want to pivot attention to the work that needs to be done to translate Paris into real action,” she said.

For companies like Dannon Co., Nestlé SA and Mars Inc., slashing greenhouse gas emissions means taking a much closer look at how the ingredients and materials they use in their products are produced, processed, transported and discarded, since most of their emissions come from the supply chain.

Yet understanding how much CO2, methane and nitrous oxide is generated by turning ears of corn into corn-flakes cereal is no simple task, food companies, environmental groups and analysts say.

The Oxfam paper’s authors recommend that companies extend their attention to emissions from farmland, rather than primarily focusing on direct emissions from their production facilities and energy usage. One place to start, they say, is to cut emissions from the world’s top five highest-emitting commodities: rice, soy, corn, wheat and palm oil.

Taken together, emissions from these crops alone are higher than those of every country in the world except China and the United States, according to Sen. She noted that emissions from deforestation for palm oil production have attracted the bulk of the attention, but field emissions are just as big a problem.

“While many companies have stepped up with commitments for deforestation-free sourcing, we want companies to actually extend that commitment to agricultural emissions, as well,” she said.

When ‘the house isn’t on fire,’ how fast should companies act?

In Asia and Oceania, the highest emissions from agriculture came from rice production. In Latin America, the main culprit was soybeans, and in North America and Europe, the greatest source of greenhouse gas emissions was corn and wheat production, according to the report.

The relatively slow movement from commodities other than palm oil reflects a lack of pressure to enact change swiftly, said Jon Dettling, managing director of Quantis USA, a consulting company that works with the food and beverage industry to quantify sustainability targets.

“Something like the palm oil issue, there are really big image risks for that. That becomes a fire they need to manage in a way that seems responsible, and they are doing that really quickly. For these other things, like wheat purchasing, it is also a priority for them, but they are taking a long-term view because the house isn’t on fire,” Dettling said.

One of the first steps for companies interested in improving their sustainability is to map out at least a rough sketch of their overall emissions, including their supply chains. Relatively few companies have done this so far, he said.

“Getting that measurement is quite important because it helps them to understand the greatest opportunities to make changes,” he said. “Based on what they know about their purchasing, they can zero in on the suppliers or specific commodities or specific farms.”

Sometimes the easiest solution can be changing suppliers of certain products. Other times, the answer is finding alternative products that are less emissions-intensive, as has been the case with palm oil. Companies can also work with farmers directly to encourage them to reduce emissions, but that isn’t always possible if the farmers are purchasing from a cooperative, as is often the case with dairy products, or if the farmers buy grain from a supplier like Cargill, which also purchases grains from many different suppliers, he said.

The problem, advocates said, is building a sense of urgency and pressure to cut emissions from the producer all the way down to the farmer.

“Currently, it’s not extremely effective, because it’s a long chain, also because there isn’t a whole lot of pressure from producers,” said Dettling.

Even if everyone along the supply chain is motivated to act, it’s not always clear which actions will be the most effective, especially on farms that are already highly efficient, according to Dettling.

“A lot of the data is fuzzy, and a lot of the solutions are fuzzy. We try to do the best we can; there’s no silver bullet,” he said.

Even without perfect data, some companies, like General Mills Inc. and Kellogg Co., are moving forward with plans to cut supply chain emissions. Both companies are using science-based targets that measure how much they will need to cut to help keep the rate of global warming below 2 degrees Celsius.