Finds critical link between full-scope emissions targets and overall emissions reductionsSpotlights noteworthy examples of actions taken by Food Emissions 50 companies
September 17, 2024 /3BL/ – As more comprehensive climate reporting rules go into effect worldwide, a new Ceres analysis of corporate disclosures in the food sector finds that companies are making progress towards reducing direct greenhouse gas emissions. However, slower progress on addressing supply chain emissions is holding companies back from reducing the total emissions needed to transition their business to a low-carbon economy.
Notably, Ceres’ report, Taking Stock: The State of Climate Action and Disclosure in the Food Sector, reveals food companies with science-based emissions targets covering their total emissions (scope 1 and 2 from their direct operations and scope 3 from their supply chains) are more likely to report lowering their overall emissions.
That important takeaway for the food sector is one of the key findings outlined in the report, which is based on a pioneering analysis by Ceres into the climate-related information disclosed by 50 of the largest North American food companies engaged by investors through its Food Emissions 50 initiative. Through the analysis, Ceres sought to answer two big questions: now that food companies are reporting emissions and setting targets, are companies genuinely reducing their emissions? And how can disclosures be improved to not only increase transparency but also spur meaningful action in on climate?
Ceres found:
1. 60 percent of companies are making progress on scope 1 and scope 2 emissions.
2. Slower progress on addressing scope 3 emissions is holding companies back from reducing total emissions.
3. Companies with full scope emissions reduction targets are more likely to be reducing emissions.
4. Companies are beginning to clarify their emissions disclosures, but there is room for improvement to enhance comparability and the ability to assess progress over time.
“Ceres’ new report serves as a lens into the current state of climate action in the food sector, and while some companies are making positive progress, too few are making significant reductions in their total emissions,” said Meryl Richards, program director, food and forests at Ceres. “Since emissions reductions efforts may take time to bear fruit in this sector, it’s even more important for companies to publish climate transition action plans so that investors know they are poised to mitigate risks and seize opportunities in the transition to a lower-emissions economy.”
In fact, by crunching disclosure numbers, Ceres identified scope 3 emissions as a critical area where the food sector needs to take more ambitious and urgent action. The analysis showed a clear connection between what companies disclosed as their supply chain emissions – the largest source of the sector’s emissions – and their total emissions. No company reported decreases in their overall emissions without their scope 3 emissions also dropping, and even large reductions by companies in scope 1 and 2 were not able to compensate for rising scope 3.
The release of Ceres’ new report follows a monumental year for climate disclosure and increased climate action in the food sector, one of the highest-emitting sectors and responsible for one-third of global emissions. In the U.S., landmark reporting regulations from the Securities and Exchange Commission and California were adopted last year, and global companies are preparing to disclose climate transition plans in line with the European Union’s Corporate Sustainability Reporting Directive, which went into effect a year ago.
Ceres’ report lays out noteworthy actions taken by major food companies to tackle emissions in the past year as examples others can follow to accelerate sector-wide progress. They include:
ADM reported how the company broke down its emissions footprint to pinpoint purchased goods and services – its primary emissions driver – as where it needs to prioritize cutting emissions.McDonald’s and Hershey have set specific targets to reduce land-based GHG emissions validated by the Science-Based Targets Initiative.General Mills, Kraft Heinz, and Starbucks committed to disclose their methane emissions and plans to reduce supply chain agricultural emissions by becoming founding members of the Dairy Methane Action Alliance.A growing number of companies are publicly supporting key legislation that could advance the adoption of lower-emissions practices in the food sector, such as the Enteric Methane Innovation Tools for Lower Emissions and Sustainable Stock Act.
In addition, the report mentions that 38 Food Emissions 50 companies now report their scope 3 emissions, up from just 20 companies when the initiative was launched in 2021. Ceres Food Emissions 50 Company Benchmark continues to track the progress companies are disclosing on essential elements of food sector climate transition plans, including General Mills publishing a plan that quantifies the climate strategies needed to meet their emissions reduction targets.
“With so much work needed for the food sector to reach a 1.5°C future, it’s encouraging to see a growing number of companies report emissions targets and publish more robust climate transition action plans,” said Nako Kobayashi, Food Emissions 50 manager at Ceres. “As our report underscores, comprehensive emissions disclosures are the best way for external stakeholders to keep track of the sector’s progress, but food companies need to go farther and urgently take concrete steps toward reaching their public targets.”
Food Emissions 50 is an investor-led initiative accelerating progress towards a net-zero future in the food sector.
Read Ceres’ Taking Stock: The State of Climate Action and Disclosure in the Food Sector here.
About Ceres
Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable world. United under a shared vision, our powerful networks of investors and companies are proving sustainability is the bottom line—changing markets and sectors from the inside out. For more information, visit ceres.org.
Media Contact: Bridget Vis, vis@ceres.org