The forgotten 10%: Climate mitigation in agricultural supply chains
A new analysis by global non-profit CDP, formerly the Carbon Disclosure Project, looks at how some of the most recognizable household brands are managing climate change. Their report argues that many of the world’s biggest food, beverage and tobacco brands are missing their biggest opportunity to mitigate climate risks.
The analysis draws on data collected by 97 food, beverage and tobacco companies on behalf of 822 institutional investors that represent over a third of the world's invested capital. It concludes that the biggest source of food-related greenhouse gas (GHG) emissions occur before produce leaves the farm gate, i.e. in the agricultural production portion of producer's supply chains. Yet less than a quarter of the major brands that disclosed to CDP this year reported their indirect GHG emissions from agricultural production. With emissions from agricultural production responsible for 10-14% of global GHG emissions, the lack of data from companies on this area suggests that at least 10% of global emissions are being unaccounted for.
CDP therefore urges companies in this sector to widen their focus beyond their direct operations to realize the significant opportunities from working with suppliers to cut emissions. There is clear business imperative for these companies to act: over a third of the 97 brands disclosing to CDP report lower costs from implementing climate change-related agricultural management practices. Furthermore, well over three quarters of the reported climate-linked agricultural practices resulted in two or more benefits for farms and their suppliers, such as soil quality improvements, water savings and yield increases.
Read the full report here.
While some of the food system challenges facing humanity are local, in an interconnected world, adopting a global perspective is essential. Many environmental issues, such as climate change, need supranational commitments and action to be addressed effectively. Due to ever increasing global trade flows, prices of commodities are connected through space; a drought in Romania may thus increase the price of wheat in Zimbabwe.