Scan Just Food’s headlines in recent weeks and food companies the world over appear to be tackling net-zero head-on. Carbon footprints are being published. Carbon-neutral claims are appearing on individual products. Promises to reduce emissions are being set. Portfolios are being chopped and changed.

“[We] need to motivate the entire business sector if we are to collectively achieve the 1.5°C ambition [of the Paris Agreement] and to halve emissions before 2030,” said Unilever chief procurement officer Dave Ingram last week.

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Unfortunately, that isn’t happening fast enough.

Last week, the World Benchmarking Alliance (WBA) published a report that ranked the 350 largest food and agriculture companies on their work on their environmental, nutritional and social impacts. This produced some “shocking” results, according to Sanne Helderman, the alliance’s lead researcher.

“We have a lot of companies that are not reporting on key themes, including on greenhouse gas emissions,” she says.

Unpicking the data shows only 26 of the world’s largest food and agriculture companies are working to reduce their Scope 1 and 2 greenhouse gas emissions in line with the Paris Agreement. Of those, ten are food manufacturers (Barry Callebaut, Ferrero, General Mills, Hershey, Mars, McCain Foods, Nestlé, Orkla, PepsiCo and Unilever). Some 123 companies showed no evidence of reducing these emissions. The results are “concerning”, noted the WBA.

For Scope 3 emissions the results were even worse. Only seven companies have either a time-bound target to reduce these in line with 1.5°C warming or a ‘net-zero by 2050 target’ for Scope 3 emissions. PepsiCo, Unilever and Meiji Holdings are the only food manufacturers in that group, according to WBA’s research.

“Scope 3 is such a daunting task,” Ignacio Gavilan, sustainability director at FMCG industry organisation The Consumer Goods Forum (CGF), says. These emissions are the indirect emissions that companies don’t own or control but which make up the lion’s share of their overall footprints. Nestlé, for example, has stated 94.8% of its 2018 greenhouse-gas emissions were of the Scope 3 variety.

This is perhaps why industry association FoodDrinkEurope (FDE) has first mapped out a plan for the low-hanging fruit in Scopes 1 and 2. The emissions associated with food and drink manufacturing in the EU represent 11% of the entire food value chain’s carbon footprint (packaging, logistics, use and end-of-life all represent around 5%, according to EU figures published in 2013, leaving agriculture with the remaining two thirds-ish).

That said, 11% still amounts to 94m tonnes of CO2e per year (slightly less than all of Belgium’s emissions). Most comes from energy use and FDE’s roadmap lists 90 measures to help reduce emissions by up to 92% come 2050. Business as usual would result in a 47% cut. Policies and technology will need to align to hit the more ambitious scenario.

Some businesses will find curbing carbon easier than others – location, energy sources, government policies and support all make a difference. SMEs, in particular, have been struggling, says the FDE report’s author, Alfredo Lopez Carretero from consultancy Ricardo. They face difficulties because of access to know-how and capital for investment, he explains.

Indeed, many smaller firms don’t have a dedicated sustainability lead. They do have agility on their side, however. “We don’t have red tape,” explains Dominie Fearn, founder of UK ready-meals maker Wild Hare. “I make a decision and it happens.”

Recently, Fearn made the bold move of promising to market the UK’s first net-zero-carbon ready-meal range. Scores are being calculated for the meals covering “every gram of ingredient” to the manufacturing process and the packaging (Fearn’s hoping to work with some of her retail clients, which include Whole Foods Market and Ocado, to extend the footprint further). Ingredients, like traditional grains and soya-free chickens, are sourced to minimise carbon, while soil audits will determine the carbon being captured over time thanks to regenerative agriculture approaches.

Whether all this has traction in the cut-throat world of convenience foods is moot. Fearn is well aware she has to work within the commercial boundaries of the ready-meals market while delivering sustainability credentials that stand out. Four years ago, she was told she was “way ahead” of her time; now she is confident carbon neutral is a selling point – even for ready meals.

Expect more claims to appear across the food sector. Brands should prepare for these to be unpicked by campaigners who see them as a shortcut to sustainability. In August, Oxfam laid out its concerns over increasing reliance on tree-planting to offset emissions – which allows big emitters to avoid making significant cuts in their own emissions and could threaten global food security as demand for land for reforestation projects intensifies. “Net zero should be a pathway to real and transformative climate action and not greenwash,” says the UK-based charity.

What impact might COP26 have?

In the lead-up to COP26, brands will have their work cut out convincing consumers (and investors) of their carbon commitments. “Consumers don’t trust brands,” says CGF’s Gavilan.

The WBA analysis, for example, showed the majority of food and drink manufacturers “underperform” on key environmental issues. Only six companies set targets and reported on them for eliminating deforestation in their supply chain; only ten report such an approach to improving soil health and agrobiodiversity. “Transparency is the starting point,” Helderman explains.

No surprise, then, to see the largest consumer-facing brands among the top performers in WBA’s rankings. The top three companies in the overall rankings were Nestlé, Unilever and Danone. They have more experience of scrutiny because consumers are closer to them – feed, farming and foodservice companies have been able to stay in the shadows.

This may well change at COP26, where the impact of food will be a hot topic. Research published this month in the journal Nature Food showed emissions from food systems account for 35% of total anthropogenic greenhouse gas emissions – higher than previously thought. Animal-based foods account for double those from plant-based foods.

The debate over consumption of meat and dairy products could well reach boiling point in November’s crunch climate talks. Debates around methane, and whether its impact is overstated, as well as carbon sequestration, will intensify. Greenpeace claimed last week a coalition of meat industry associations has been promoting intensive livestock farming as a solution to address climate change.

CGF’s Gavilan is hoping for a more pragmatic approach. Take, for example, a strategy espoused by some to convince everybody to not eat meat so the sector (and its emissions) will disappear. “Good luck with that [because] it will take two generations,” he says. Instead, “let’s fix the sector [and] at the same time we start encouraging people to eat less meat”.

Dairy manufacturers recently told Just Food they were “fighting for their right to exist”. Regenerative agriculture has shot into the consciousness of the corporates reliant on animal products. Nestlé has just announced that it will pay premiums for regenerative agricultural goods, but money alone isn’t going to be enough, according to the firm’s UK responsible sourcing manager Robin Sundaram. “We’re asking for big changes […and] a lot of farmers still don’t really know what they need to do, how are they going to do it, how are they going to make this shift.”

Getting suppliers on-board

Collaboration throughout the supply chain and between businesses is seen as key. “The entire dairy community is at the table – from farmers and cooperatives to processors, household brands and retailers,” explains Karen Scanlon, executive vice president for environmental stewardship at US trade body Dairy Management and the Innovation Center for US Dairy, of the sector’s pledge to reach carbon neutrality.

Supplier engagement is crucial in tackling those all-important Scope 3 emissions. Unilever has just announced plans to work with the 300 suppliers that “contribute most significantly to our overall greenhouse gas footprint”. Some have set stretching targets that align with what science says is needed and are well on their way to achieving them. Many have targets that aren’t ambitious enough. And others have not yet begun their journey at all.

Another manufacturer upping its engagement with suppliers is Nomad Foods. The European frozen-food specialist has just set new emission reduction targets approved by the Science-Based Targets Initiative (SBTi), and also promised to help its “top 75% suppliers by emissions” develop their own targets by 2025.

“This is a very important area for our business,” explains CEO Stefan Descheemaeker in an email to Just Food. Briefings are already taking place and “our procurement team is also developing joint business plans that incorporate greenhouse gas emission reduction measures”.

Sarah Blanchard, a sustainable food consultant based in Germany, says more manufacturers and retailers are looking to get to grips with which suppliers are important in terms of emissions. For this, they need to consider volumes over sales value. “Not everybody has that information at their fingertips,” she explains. “This will take time, patience and a sharp focus.”

Calculating carbon

There are still plenty of gaps to plug in the data around emissions from food. Some firms have invested huge amounts of time, energy and money into producing detailed footprints.

Arla Foods, the Denmark-based dairy giant, is building an international database with carbon calculations at farm level. Early figures collected from almost 8,000 farms suggest the company has some of “the most climate-efficient dairy farmers in the world” with an average level of 1.15 kg CO2e per kilo of milk.

More footprints are appearing every week, so comparisons designed to encourage consumers to switch to low-carbon options are inevitable.

UK cheese producer Wyke Farms has just published data it says shows its average was 1.12kgCO2e per kilo, lower than the UK average of 1.55kgCO2e and less than half that of the global average, of 2.5kgCO2e. “We are already making massive inroads [into reducing emissions on farm],” says managing director Richard Clothier.

Yeo Valley – the largest organic dairy company in the UK – has been measuring carbon in every hectare of the home farm to provide a “heat map” of where the carbon is. Since the sampling started seven years ago, “we’ve built 50% more carbon than the footprint of producing the milk”, says CEO Tim Mead.

He talks of weaponising farming rather than demonising it. “We don’t know the answers but for us not to try [and] weaponise soil in the fight against climate change […] would be a dereliction of duty.”

Meanwhile, plant-based spreads business Upfield Group claims it is the first food company to estimate its “emissions savings” from consumers choosing its products over dairy. Six million tonnes of CO2e is the figure experts at Anthesis, a global consultancy, came up with; though this assumes all consumers purchase a plant-based margarine instead of dairy-based equivalents.

In reality, of course, consumer behaviour and purchasing habits vary. Simon Davis, sustainable agriculture practice lead at Anthesis, admits these kinds of calculations have their limitations but are valuable. “It’s starting to think about how we wrap up the science in a way that is more digestible for consumers to understand and invest in,” he says.

WBA’s findings may well be hard to swallow. The laggards must be called out but it is the leaders that arguably deserve more attention. “I think we need to focus mostly on the inspirational part, because I think that helps companies move and get competitive when it comes to sustainability,” says Helderman.

This article is part of a special series GlobalData Media is publishing in the run-up to COP26, which takes place in Glasgow from 1-12 November 2021. Our focus is on the opportunities and challenges for business of the transition to clean energy and net-zero greenhouse gas emissions. Other articles in this series include: 

Energy Monitor – Why success at COP26 is vital for business – What drinks brand owners should know about COP26

Verdict – Inside Cervest’s plan to map the world’s climate risk

GlobalData analysis: ESG (Environmental, Social, and Governance) in Consumer Goods – Thematic Research