We can’t deal with climate change without addressing the way we produce our food; agriculture, land use and the food supply chain accounts for more than a third of manmade greenhouse gas emissions.
Yet ten out of Britain’s 30 largest food companies do not report any ‘scope 3’ carbon emissions, failing to provide a metric considered a critical tool in revealing the potential carbon risk embedded in corporate supply chains, according to the Tortoise Better Food Index, a new ranking of food companies published this Thursday.
Scope 3 refers to all the emissions that a business is indirectly responsible for, up and down its value chain; it typically accounts for 90 to 95 per cent of all emissions in the UK food sector.
Tracking and reporting scope 3 emissions enables companies to bring down emissions from their suppliers and allows investors to see the scale of potential regulatory risk a business is exposed to.
Companies that did not report scope 3 emissions include Boparan Holdings, which owns 2 Sisters, one of the UK’s biggest suppliers of chicken pieces to supermarkets, and Müller UK and Ireland, which processes and distributes dairy products. (The snapshot of scope 3 reporting is based on data gathered in April, and one of the companies in the Index has since published the relevant reporting).
Nearly all of the companies in the Index reported emissions from their own operations and the energy they buy – known as ‘scope 1’ and ‘scope 2’.
But there were three companies, each wholly-owned subsidiaries of major UK supermarkets – Farmers Boy (Morrisons), Neerock (Morrisons) and International Procurement Logistics (Asda), that did not report any carbon emissions at all. The retailers did, however, report scope 1, 2 and 3 emissions at a group level.
A Morrisons spokesperson said: “Neerock and Farmers Boy are part of the Morrisons group. We provide scope 1, 2 and 3 emissions at a Morrisons group level.”
An IPL spokesperson said: “As a wholly owned subsidiary, IPL are included within the Asda Group scope 1, 2 and 3 emission figures.”
Several companies appear to be drastically under-reporting emissions from their supply chain. Mars UK reported just 56 tonnes of CO2e as their scope 3 emissions. United Biscuits, which produces McVitie’s Digestives, reported their scope 3 emissions at 76 tonnes.
Both these numbers were calculated based on the greenhouse gas impacts of any ‘relevant business transport processes’ during 2020 – the year in which most business transport was halted because of the Covid-19 pandemic.
Müller set a Net Zero target, despite not reporting any scope 3 emissions, raising questions about whether these ambitions are informed by a full picture of a company’s environmental impact. “A lot of net zero targets probably came out of marketing budgets,” says Joshua Deru, Senior Climate Consultant at 3Keel, sustainability advisors. “It wasn’t a business operational thing. They just wanted to make a climate statement.”
Why is this happening?
It’s only mandatory for large private companies and public companies to disclose energy use and related emissions, including from business travel in rental cars or employee-owned vehicles where they are responsible for purchasing the fuel. Reporting other scope 3 emissions, such as those related to sourcing ingredients and transporting them – where the bulk of value-chain emissions lie – are voluntary.
Poor reporting on scope 3 emissions is also down to a lack of data and transparency across the value-chain, as well as the costs associated with measuring environmental impact accurately. A spokesperson for WRAP, the environmental NGO, notes that food supply chains are long, while sources of supply can shift according to the season.
Accounting for scope 3 in food systems also has to include biological processes, such as the transfer of carbon from the atmosphere to soil via plants, and these can be hard to calculate, the WRAP spokesperson adds.
A few companies did report a more representative number for their value-chain emissions. For example, Unilever and Arla’s scope 3 emissions made up 99 per cent and 96 per cent of their total emissions, respectively, in 2021.
A spokesperson for Müller UK & Ireland said: “Our approach is to constantly look at our own operations to ensure they are as efficient as they can be, while working with our customers and suppliers to make sure that business growth is achieved through responsible and environmentally sustainable practices.”
A 2 Sisters spokesperson said the company had carried out a scope 3 value chain assessment and intended to make this public when it released an updated sustainability strategy, due later this year.
A Mars UK spokesperson said the company aimed to be “net zero by 2050 across all scopes.”
A spokesperson for Pladis, which owns United Biscuits, said the business has been working with a third party on a full mapping of scope 1, 2 and 3 emissions
“The scope 1, 2 and 3 data collection process has now been completed and emissions mapping is being presented to our Pladis teams in both countries,” the spokesperson said. “This will enable us to publish more comprehensive figures in the future.”
Measuring scope 3 is not easy. Companies will need help to assess the data accurately and fairly across the sector. Ultimately, making this mandatory may be the only way to bring down the food system’s emissions.
eco-nomics
If the cap fits
G7 leaders meeting this week are seeking a deal to impose a “price cap” on Russian oil. The proposal, pushed by the US, will seek to stem flows of cash to the Kremlin generated by soaring crude prices. In practice it would mean that countries agree to refuse insurance for Russian tankers that sell oil above a fixed price. Since the invasion of Ukraine, the EU has collectively spent €32bn on Russian oil imports and €26bn on gas. For the cap to be truly effective the US and EU will also need countries like India – now a large importer of Russian crude – as well as Argentina, South Africa, Senegal and Indonesia, to buy-in. The G7 also seeking to address China’s hold on global energy infrastructure through a $600bn Belt and Road-inspired initiative. As part of the package, Germany has committed €300m to a “Just Energy Transition Partnership” that will help wean South Africa off coal.
policy
Record renewables
China’s expansion in renewable energy continues to defy expectations. According to the Renewable Energy Engineering Institute, China’s leading renewable energy think tank, the country is set to install a record 156 gigawatts of wind turbines and solar panels in 2022 – a 25 per cent jump on the record set last year. But China’s renewables record-breaking has yet to make a dent in its coal consumption. Last Friday premier Li Keqiang “urged tapping into advanced coal capacity, securing power supply and resolutely preventing power outages amid the peak summer season”, according to state media. And renewed interest in coal as a secure fuel isn’t just proliferating in China: the IEA has found that coal investments globally are set to rise 10 per cent this year. For comparison, the annual rate of clean energy investment has climbed 12 per cent since 2020.
nature
The other Cop
Two years after a UN biodiversity summit due to take place in China was scuppered by Covid, progress on a global agreement to halt nature loss remains elusive. Negotiations in Nairobi this week produced a heavily bracketed draft text which agreed on wording for just two of the 20 biodiversity goals – technology sharing and urban green spaces. Failure to reach consensus means that negotiators will have a mammoth lift over the next few months as they prepare a deal for the delayed Cop15 conference taking place in December in Montreal. The stakes are existential – for both humans and nature.
activism
Science on the stand
Lawyers continue to break new ground in their attempts to hold fossil fuel companies accountable for environmental damage. In a case brought against Woodside Energy, the Australian Conservation Foundation will argue that a planned $12bn gasfield project off the west coast of Australia will directly contribute to the destruction of the Great Barrier Reef, some 3000km away. To prove a direct connection between greenhouse gas emissions, rising global temperatures and coral bleaching, the lawyers will rely on new developments in the field of “attribution science”. If their arguments hold up, sources tell the FT that it could “open the floodgates for cases against companies that have historically emitted.”
Thanks for reading.
Jeevan Vasagar
Additional reporting by Tortoise Intelligence and Barney Macintyre.
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