Food firms must collaborate to unearth climate risks, says CDP
Some of the world's largest food, beverage and tobacco brands are missing out on significant financial and production quality gains by failing to mitigate climate risks and reduce carbon emissions, a new report has warned.
The report from CDP, titled ‘The forgotten 10%: Climate mitigation in agricultural supply chains’, collected data from 97 global companies on behalf of 822 investors that represent over a third of the world’s invested capital. It looked specifically at the agricultural production portion of producer’s supply chains, which is now responsible for 10-14% of global emissions.
CDP concluded that food and beverage companies must widen their focus beyond their own operations to realise ‘significant opportunities’ from working with suppliers to cut emissions.
“Collaboration with stakeholders holds the key for brands seeking to unlock opportunities to become resilient to climate change,” explained CDP’s co-chief operating officer Frances Way. “Our data shows that companies who engage with one or more of their stakeholders are more than twice as likely to see returns from emissions reduction investments as companies that don’t.”
The majority of emissions from food production occur before produce leaves the gate; in the growing portion of a producer’s supply chain. Yet, less than a quarter of the brands that chose to disclose their information to CDP reported their indirect greenhouse gas emissions from agricultural production, leaving up to 10% of emissions unaccounted for.
But CDP does point out that companies are heading in the right direction. Seventy three of the brands that were surveyed said they are now engaging with suppliers on managing climate change, compared with 64 in 2013.
Eighty-three per cent of the firms disclosing to CDP reported two or more benefits from implementing climate change-related agricultural management practices. Over a third cited lower costs; 49% noticed significant water savings and 48% saw an overall increase in yields.
Coca-Cola, Dairy Crest Group, Danone, Kellogg, Nestle and Unilever were identified as companies being ‘ahead of the pack’ for their approach to climate mitigation in their agricultural supply chains. According to CDP, these firms have disclosed information for the past two years, implementing agricultural management practices and announcing reduced costs in the process.
The report also highlighted the work of SABMiller - the world’s second largest brewer by revenue - which achieved carbon dioxide equivalent reductions of 16% over the past four years by working with barley farmers to improve irrigation and fertiliser techniques.
Almost 90% of the companies surveyed by CDP now recognise climate change as a ‘huge business risk’. Recent extreme weather events – such as the drought in California which is costing the agricultural sector over $2bn - highlight just how vulnerable the sector has become. Last year, the International Institute for Applied Systems Analysis (IIASA) called for ‘urgent action’ to ensure sustainable transformations were implemented in the agricultural sector.
At the end of 2014, the Alliance for Sustainable Agriculture - which comprises of 66 grower organisations, agribusinesses, and food, beverage and retail firms - announced a commitment to drive sustainable agriculture in the US with six new environmental pledges.