Can food conglomerates measure the carbon footprint of their suppliers?
Climate change and agriculture are deeply intertwined, with agriculture both contributing to it and as well as being affected by disturbances in it. As per reports in 2015, about 13% of greenhouse gas emissions came from agriculture alone. It is the 2nd most contributing sector to emissions after energy and is expected to increase to 15% by 2030. This increase is mainly due to the growing population and changing dietary preferences (demand for meat and its products). Cultivation needs huge amount of land alongside massive amount of fertilizers. This results in massive deforestation with the CO2 emissions causing irreparable damage to crops.
To fight this menace, many food conglomerates are committing to cutting their carbon footprint across the value chain and holding their suppliers accountable. Since the majority of carbon emission happens at the sourcing level of the supply chain; hence it becomes prerogative for companies to increasingly opt for suppliers who mitigate environmental risks and provide value. For example, Walmart has been one of the most active retail giants in encouraging food producers and manufacturers to measure and manage their emissions. They have implemented a supplier engagement program which is a scorecard with a set of questions and the answer to each of them provides a relative score for key sustainability metrics, such as material efficiency, natural resources, energy and climate. Walmart has publicly stated that preference will be given to suppliers with strong and improving environmental performance.
As for PepsiCo, they measure the carbon footprint (CFP) of its Tropicana Pure Premium orange juice with the help of Carbon Trust, given that 35% of the emissions comes from the growing process and more precisely from the use of fertilizers. PepsiCo in a pilot program along with their supplier in Florida is testing two alternative reduced-carbon fertilizers, that have a lower environmental impact and which reduces nitrous oxide emissions by up to 90%. This reduces the total CFP of Tropicana Pure Premium® juice by 15%. Even Tesco, UK’s top retailer calculates and displays the CFP of its orange juices. It also compares the CFP of chilled fresh juice against juice made from concentrate, enabling the consumer to know which one has the smallest carbon impact and why.
Nestle, on the other hand, receives 85% of the total electricity required by its factories, from one of the largest wind farms in Mexico. This reduces the amount of CO2 released into the atmosphere by more than 124,000 tons a year, the equivalent of taking 39,000 small cars off the road annually! Nestle, deals only with suppliers who are benchmarked and evaluated to deliver continuous improvement in quality and service. DSM, a company specializing in Nutrition, Health & Sustainable Living is also committed to reducing their own greenhouse-gas (GHG) emissions by — sourcing more electricity from renewable sources and by improving the energy efficiency of existing operations. Their target is to reach a 40–45% GHG efficiency improvement by the year 2025.
Larger organizations eventually should develop generic models for measuring carbon footprint which will lead to standardization and a norm for the entire industry. This could even result in decentralized ecosystems to come up via sharing of the CFP data across the buyer network, supplier network, consumers as well as regulators. The availability of this data can result in a multitude of supplier awareness programs like capacity building and supplier audits through platforms like Truvito. The more aware food companies become of the impact of every piece of their supply chain, the better they will diminish their carbon footprint.
Thus, reducing GHG emissions will not only lead to cost savings through better efficiency of natural resources but will also allow companies to make enhanced, more informed decisions about how to run their operations. By displaying their commitment in tackling emissions, companies improve their brand image and also become part of the broader initiative of corporate social responsibility. The change has already begun with these forward-thinking food manufacturers and it’s time for each of us to become a cog in this wheel and step towards a bright and sustainable future.
Reference:
Wal-Mart: http://walmartstores.com/download/4055.pdf
DSM: https://www.dsm.com/corporate/sustainability/climate-change.html
