US food giants including Costco and JBS accused of failing to tackle Scope 3 emissions
An analysis of how 50 of North America's largest food companies' climate efforts has found that less than half (38%) disclose their indirect (Scope 3) emissions.
This is despite the fact that, for most businesses in the sector, Scope 3 emissions will be higher than Scope 1 (direct) and Scope 2 (power-related) emissions combined. CDP estimates that the average company’s supply chain emissions are estimated to be around five-and-a-half times greater than those generated by their direct operations. For the average North American food corporation, 80% of annual emissions will fall into the Scope 3 category, according to Ceres.
The new analysis is from Ceres and covers businesses at all parts of the food system, including suppliers like Bunge, Archer Daniels Midland (ADM), Tyson Foods and JBS; manufacturers like General Mills and Kraft Heinz; retailers like Walmart and Kroger and food outlets such as Starbucks, McDonald’s, Wendy’s and Domino’s.
Ceres assessed the climate information disclosed by all 50 companies to ascertain whether they disclosed Scope 3 emissions from three key sources – purchased goods and services, agriculture and land-use change in the supply chain. To this latter point, land-use change for food production is estimated to have driven 75% of deforestation by area size to date.
Only 19 of the companies assessed were disclosing Scope 3 emissions from all of these sources – a minor increase from 16 companies in 2019. Ceres checked disclosures through platforms such as CDP as well as through corporate information such as websites and annual reports.
Ceres also researched whether the companies had science-based targets verified in line with the Paris Agreement’s 1.5C trajectory. The Science-Based Targets initiative requires businesses aiming for 1.5C to set Scope 3 targets if Scope 3 emissions account for 40% or more of their annual emissions footprint. Such targets must have boundaries that address two-thirds of total Scope 3 emissions.
Only 15 of the companies had set a 1.5C-aligned, verified, science-based target when the research was conducted, up from nine in 2019.
Just three businesses out of the 50 – namely Starbucks, Mondelez International and Hershey – were taking both of the actions assessed by ceres.
The benchmark is intended to inform investors, shaping their climate-related engagements with companies in the food sector. Ceres has stated that it will update the benchmark in the coming months, showing investors which companies have taken note.
Notably, some of the companies to have taken neither of the actions assessed by Ceres have announced intentions to reach net-zero. Among this cohort is JBS, which joined the Race to Zero initiative earlier this month after committing to a net-zero value chain by 2040 back in March.