{"id":8988,"date":"2025-04-11T11:21:00","date_gmt":"2025-04-11T04:21:00","guid":{"rendered":"https:\/\/globalcompact-th.com\/articles\/the-challenges-facing-food-manufacturers-on-scope-3-emissions\/"},"modified":"2025-11-06T21:52:03","modified_gmt":"2025-11-06T14:52:03","slug":"the-challenges-facing-food-manufacturers-on-scope-3-emissions","status":"publish","type":"articles","link":"https:\/\/globalcompact-th.com\/en\/articles\/the-challenges-facing-food-manufacturers-on-scope-3-emissions\/","title":{"rendered":"The challenges facing food manufacturers on Scope 3 emissions"},"content":{"rendered":"
\n

\"\"<\/h1>\n

Reducing so-called Scope 3 emissions from food manufacturers’ supply chains will take time, money and patience.<\/strong><\/span><\/p>\n<\/div>\n

By Dean Best<\/a><\/strong><\/p>\n

When it comes to greenhouse-gas emissions, three really is the magic number.<\/p>\n

It\u2019s also the number causing furrowed brows at food manufacturers looking to reduce their environmental footprint.<\/p>\n

The bulk of a typical food manufacturer\u2019s emissions are now usually defined as Scope 3 emissions. Under the internationally-recognised Greenhouse Gas Protocol<\/a>, an organisation\u2019s emissions are split into three \u2018scopes\u2019. Scope 1 covers direct emissions from owned or controlled sources. A second, Scope 2, covers indirect emissions from the generation of the electricity, steam, heating and cooling bought and consumed by a reporting organisation. Scope 3 includes all other indirect emissions that occur in a company\u2019s value chain.<\/p>\n

Scope 3 emissions can account for 90-95% of a food manufacturer\u2019s emissions \u2013 and, if a company is serious about aligning its business with the UN\u2019s climate goals, it\u2019s clear these need to be tackled.<\/p>\n

However, with Scope 3 emissions occurring throughout the value chain, they can be hard to calculate and, given a food manufacturer is working with numerous actors, difficult to address and reduce.<\/p>\n

 <\/div>\n

\u201cThis definitely keeps our members awake at night,\u201d Ignacio Gavilan, sustainability director at industry association The Consumer Goods Forum, says. \u201cIt\u2019s something that was not given proper attention until the last 18 months and then, over the past six and definitely with COP26, it escalated. Members are concerned about Scope 3.\u201d<\/p>\n

Few public targets<\/h3>\n

However, it\u2019s far from being the case that all major food manufacturers have set out targets to tackle these emissions. A report published in the autumn by the World Benchmarking Alliance (WBA) ranked the 350 largest food and agriculture companies on their work on their environmental, nutritional and social impacts.<\/p>\n

At the time, the data showed only 26 of the world\u2019s largest food and agriculture companies were working to reduce their Scope 1 and 2 greenhouse gas emissions in line with the Paris Agreement. Only seven had either a time-bound target to reduce Scope 3 emissions in line with the UN\u2019s 1.5\u00b0C warming target or a \u2018net-zero by 2050 target\u2019.<\/p>\n

World Benchmarking Alliance’s 2021 Food and Agriculture Benchmark – top 10
Companies scored out of 100 for record on environmental, social and nutritional issues
\"\"
Source:<\/span> World Benchmarking Alliance<\/a><\/strong><\/p>\n

\n

Companies scored out of 100 for record on environmental, social and nutritional issues<\/span><\/p>\n<\/div>\n

Earthworm, the non-profit formerly known as The Forest Trust\/TFT, says the lack of disclosure around Scope 3 emissions is \u201ctelling\u201d.<\/p>\n

\u201cWe don\u2019t just need food businesses to disclose their Scope 3 emissions, we need them to proactively take action to reduce them,\u201d Earthworm CEO Bastien Sachet says. \u201cBy the middle of the century, the same time as so many corporate net zero targets are to be achieved, it\u2019s estimated we will need to produce 50% more food. There is much to do to ensure that demand is met without driving further deforestation.\u201d<\/p>\n

He adds: \u201cNet zero targets cannot be achieved without businesses going out there to reach, influence and support their suppliers to not just change their agricultural practices, but transform them, using regenerative agriculture to get better use of their land, in ways that don\u2019t harm the soil and wider environment.\u201d<\/p>\n

To try to get to grips with Scope 3, a food manufacturer must turn to its suppliers and work with the numerous ingredients, packaging, distribution (and more) businesses in their value chains.<\/p>\n

Nevertheless, fresh data out this week (across industries, not only in the packaged-food industry) gives an indication of how challenging that task will be.<\/p>\n

CDP, the UK-based non-profit that helps businesses measure their environmental impact, issued its Global Supply Chain Report 2021<\/em><\/a>. For the report, around 200 large businesses across industries (in food, they included PepsiCo, Unilever, Grupo Bimbo, Kellogg and Marfrig Global Foods) asked for information from more than 23,000 suppliers on risks and opportunities related to climate change, forests and water security.<\/p>\n

Around 11,400 suppliers (including more than 5,000 SMEs) responded, which CDP said was a \u201crecord\u201d for its reporting but still equated to less than half of those surveyed. Of those suppliers that provided information, the CDP said 71% reported Scope 1 emissions, 55% Scope 2 and 20% Scope 3 from purchased goods and services.<\/p>\n

The challenge is huge. Mars, home to brands from Snickers chocolate and Dolmio cooking sauces to Pedigree pet food, started work on Scope 3 emissions more than a decade ago. It wasn\u2019t until 2017 the US giant felt able to set public targets, which they updated last year to a goal of net-zero greenhouse gas emissions across its value chain by 2050.<\/p>\n

\u201cWe\u2019ve leaned in quite hard on better understanding Scope 3 and on setting targets and are now, it\u2019s fair to say, several years into executing strategies to actually work on Scope 3,\u201d Kevin Rabinovitch, global vice president for sustainability and chief climate officer at Mars, tells Just Food.<\/p>\n

Collective action<\/h3>\n

As one of the world\u2019s largest chocolate manufacturers, it\u2019s no surprise the area Mars sought to tackle first is deforestation, given the impact land-use change has on Scope 3 emissions. The company\u2019s efforts have included being a member of the CGF\u2019s Forest Positive Coalition, a group of businesses trying to eliminate deforestation, forest degradation and conversion from commodity supply chains. \u201cThe opportunity is not just to change our supply chains but to transform the sectors that we source from,\u201d Rabinovitch says.<\/p>\n

The Forest Positive Coalition is the CGF\u2019s latest attempt to tackle deforestation after a target set under the auspices of the organisation in 2010 to achieve \u201cnet deforestation\u201d by 2020 was missed<\/a>.<\/p>\n

Gavilan says the organisation has \u201clearnt the hard way that committing to these things and not delivering doesn\u2019t give us the best of reputations\u201d but he remains firm in his belief of the importance of collective action. \u201cA collective effort makes more sense because suppliers will hear it from all of the top clients. And they\u2019ll say \u2018Okay, so, this is coming. I need to adapt.\u2019\u201d<\/p>\n

Rabinovitch acknowledges the way Mars and other buyers of palm oil are trying to address the challenge of deforestation has changed, with a focus now on \u201clandscape engagement\u201d, adding: \u201cIn some of these landscapes, there\u2019s not one commodity that\u2019s the driver of deforestation. There\u2019s multiple commodities, there\u2019s some mining, some urbanisation, poverty. You need to pivot from looking at your commodity to looking at the geography and thinking about how you drive a system change.\u201d He points to initiatives such as The Coalition for Sustainable Livelihoods (CSL), a programme in Indonesia looking at economic development, reducing poverty and helping resource management.<\/p>\n

Mars has, however, consolidated its palm-oil supply network, bringing the number of mills from \u201cmore than 1,500\u201d to \u201cwell under 100 mills and with the number still on the way down\u201d, Rabinovitch says. \u201cIf it\u2019s spread over 1,500 mills, you\u2019re not going to make any difference at all. You\u2019ll put all your energy into due diligence, finding problems and have nothing left to actually do anything.\u201d<\/p>\n

The Ben\u2019s Original cooking sauces manufacturer will look to reduce its suppliers in other areas. \u201cWe are starting up the S curve on greenhouse gas emissions and agriculture and, you know, three years from now, I\u2019ll be able to have this same sort of conversation about what has happened in regenerative agriculture,\u201d Rabinovitch says.<\/p>\n

Down on the farms<\/h3>\n

Food manufacturers will be at different stages when it comes to working with suppliers on Scope 3. HKScan, the Finland-based group with operations across the Nordic and Baltic markets, has 80 \u201cpilot farms\u201d in Finland and Sweden with which it is working to reduce emissions from meat production.<\/p>\n

Ulf Jahnsson, HKScan\u2019s VP for strategic development for primary production, says the aim of the project is to develop \u201cbest practice\u201d to then \u201cscale up\u201d to the company\u2019s 7,000 contracted farmers. It remains, however, early days. Ultimately, HKScan wants to get to the point where all farmers supplying the business will have climate actions included in their contracts.<\/p>\n

\u201cFirst, we have to show them what status they are today. Then we have to help them with practical solutions and then the practical solutions need to be connected to productivity,\u201d Jahnsson says. \u201cSo, there are still three things which have to fit. After that, when these are clear and we can say \u2018Hey, now we are there\u2019, then we are ready to start to put demands into contracts.\u201d<\/p>\n

Productivity is an important factor as reducing emissions will necessitate investment by farmers. \u201cI\u2019m a farmer, too, so I\u2019m a practical guy,\u201d Jahnsson says. \u201cBased on the experience we have from the pilot farms, there are many things related to productivity. The optimisation of fertilisers, the cover crops and so on, they are also good for the farmers from the bottom line point-of-view, not only from the emissions point-of-view. We have to have a connection with productivity. Otherwise, this doesn\u2019t work.\u201d<\/p>\n

And what about the cost to HKScan itself? Jahnsson believes, ultimately, costs will be passed down to the consumer. \u201cAt the end of the day, it\u2019s of course the consumer that needs to be able to pay for the things we are doing. First, we pay the producers but, in the end, we need to have the consumers paying the extra for what the farmers will do in the future, concerning emissions on farms.\u201d<\/p>\n

At the other end of the Baltic Sea in Denmark sits Danish Crown, the co-operative that is Europe\u2019s largest meat processor. Danish Crown has a target where its meat production is \u201cnet climate-neutral\u201d (which the co-op says equates to being a \u2018net-zero\u2019 emissions company) by 2050.<\/p>\n

In a similar vein to HKScan, the farm is one of Danish Crown\u2019s focuses as it looks to bear down on Scope 3 emissions. \u201cIt\u2019s animal feed, manure management, methane loss and it\u2019s other initiatives on-farm. Those are the big elements of reducing emissions per farm,\u201d COO Preben Sunke says.<\/p>\n

Sunke says Danish Crown has started projects on \u201clow-hanging fruit\u201d such as methane storage and believes it has the \u201cknown technology\u201d to hit an interim target of a 50% reduction by 2030. \u201cIt\u2019s a fair picture at the beginning but, as you get closer to the target, it\u2019s, of course, going to be the tougher,\u201d he reflects.<\/p>\n

What about the consumer?<\/h3>\n

Both HKScan and Danish Crown do not include emissions from consumers, in areas like waste, in their Scope 3 targets. \u201cWe can only control up to the shelf at the retailer,\u201d Sunke says. \u201cWhatever the consumer does from taking it off the shelf, there we are out of control. Unless we want to do a big surveillance programme, we are losing track.\u201d<\/p>\n

Both companies have initiatives in place on packaging but they are not alone in measuring their Scope 3 emissions up to retailers\u2019 shelves. From then on, it\u2019s fair to say the picture remains complicated for food manufacturers.<\/p>\n

However, Kaya Axelsson, Net Zero Policy Engagement Fellow at University of Oxford, says some companies are starting to think about emissions downstream. \u201cOur research has shown that some of the leading companies are, qualitatively if not quantitatively, taking responsibility for consumer emissions,\u201d she says.<\/p>\n

\u201cA good example might be that the Greenhouse Gas Protocol does not require a company to include in their net-zero target, or their emissions target for Scope 3, the extra water use from the use of a product \u2013 but they realise that this is going to be an issue and so they engage, they figure out ways to use their product or to sell different products, they start changing their business model to address this, even if it is not quantified in their net zero emission strategy.<\/p>\n

\u201cCall it \u2018beyond the Scope\u2019 but it\u2019s clear that there\u2019s demand for that. Ultimately, does it matter if the consumer knows what Scope 3 is? Probably not. It matters what the consumer thinks the company\u2019s responsibility is.\u201d<\/p>\n

Offsetting necessary<\/h3>\n

For all a food manufacturer\u2019s work on Scope 3, it is very likely that, ultimately, companies will need some form of offsetting to achieve their targets. Some, like Unilever, have been open that will be the case; the Marmite maker has said any \u201cresidual emissions\u201d in its supply chain would be \u201cbalanced through purchased or self-generated offsets\u201d.<\/p>\n

The debates around offsetting will be covered on Just Food later this month. Nevertheless, the manufacturers interviewed for this piece broadly agreed some offsetting initiatives will be needed.<\/p>\n

\u201cFrankly any food business that suggests they will get to net zero without needing to take action outside of their value chain either hasn\u2019t done the math right, or is being a bit disingenuous,\u201d Mars\u2019 Rabinovitch says. \u201cThere\u2019s a lot of enthusiasm around the potential of agriculture and there should be. We could do agriculture in a much lower-carbon way than we do today and we absolutely should. However, agriculture will not get to net-zero emissions within the boundaries of the farm. There will be residual emissions.\u201d<\/p>\n

At Danish Crown, Sunke says he believes the company will need to use \u201csome carbon capture to reach that final target in 2050\u201d.<\/p>\n

HKScan\u2019s Jahnsson puts the emphasis on sequestration. \u201cWe are now looking quite deeply at sequestration, at what is happening under the ground, in the grasslands, and we are taking measures there,\u201d he says. \u201cIf we want to be neutral, half of the emissions\u2019 decrease will come from the actions with the farmers but half will come from sequestration.\u201d<\/p>\n

However, when pressed, he adds: \u201cI hope the sequestration will do but we need more science. We don\u2019t know enough about sequestration yet but my hope and vision are that we can do it with sequestration, instead of offsetting it somewhere else.\u201d<\/p>\n

For Axelsson, there are questions surrounding food manufacturers\u2019 strategies on offsetting. \u201cThere are two ways to slice the offsetting issue,\u201d she says. \u201cThe first one is just what to offset. Companies need to be much stricter and set out much more clear conditions on what they\u2019re offsetting.<\/p>\n

\u201cThen there\u2019s the question of how to offset. One thing that might be an opportunity for food and ag is if you\u2019ve got a lot of methane emissions, they can offset that very well with biological sinks because the methane emissions are on the same timeline as the biological sinks will probably last. They\u2019re more potent but they last in the atmosphere for less time.\u201d<\/p>\n

She adds: \u201cBut then, if you\u2019ve got CO2 emissions ongoing as part of your net-zero strategy, you need to be thinking about investing in removals with long-term storage instead of just using these avoided emissions or reduced emissions offsets.\u201d<\/p>\n

A question of standards<\/h3>\n

Overall, while only a minority of food manufacturers have set out public commitments on Scope 3, there are signs of an increased appetite to tackle the emissions.<\/p>\n

That said, many of those manufacturers remain at a very early stage of calculating these emissions and are, at best, working on initial programmes with suppliers. And this week\u2019s CDP report indicates how challenging that can be.<\/p>\n

Looking ahead, the CGF\u2019s Gavilan wants some standardisation in the requests food manufacturers make of their suppliers.<\/p>\n

\u201cI know there are some efforts out there to standardise a template to use while engaging suppliers. I think it\u2019s much needed because otherwise, if you don\u2019t have a coherent ask to suppliers, the risk is that they get discouraged,\u201d he explains.<\/p>\n

\u201cCompanies come to them with thousands of things. It has an implication of cost as well. It has to be a productive, transparent, cohesive engagement. Otherwise, if we over-complicate it, suppliers can get discouraged.\u201d<\/p>\n

And, just yesterday, came an announcement that underlined the lack of common standards across the piece when it comes to Scope 3.<\/p>\n

UK not-for-profit sustainability consultancy WRAP announced plans to later this year announce \u201cmeasurement and reporting protocols\u201d on Scope 3 for food and drink companies operating in the country.<\/p>\n

WRAP chief executive Marcus Gover said: \u201cThere is currently no consistent way of quantifying supply chain emissions and businesses either have to commission expensive life cycle analysis for each ingredient or use average values from a variety of contrasting public data sets. This is a burden for suppliers and makes it impossible to compare the information provided by different businesses.<\/p>\n

\u201cIf we are to make reliable progress in tackling climate change then we have to have a common measurement and an agreed set of emission factors that everyone can use.\u201d<\/p>\n

At the CGF, Gavilan says there is a recognition among food manufacturers of the need to act on Scope 3.<\/p>\n

\u201cI think businesses are now clear that there\u2019s no way back on this. You can hide for a couple more years if you want but, in a world of increased transparency, I think when the tide goes out, that\u2019s when you find out who\u2019s been swimming naked. All of them know they have to start disclosing, they have to start being open about this. Consumers are two clicks away from a lot of information.\u201d<\/p>\n

Source<\/strong>: https:\/\/www.just-food.com\/features\/the-challenges-facing-food-manufacturers-on-scope-3-emissions\/<\/a> <\/p>\n

For more coverage across our publishing network<\/em> of the issues created by the supply chain crisis, read the following:<\/em><\/p>\n