Food companies claim emission reductions within the year, experts skeptical

Editor's Note: This article is part of a series exploring the opportunities and challenges facing supply chains in 2023.Click here to read the rest of the series。

Last fall, on the eve of the UN COP27 climate conference, beverage giant Coca-Cola was announced as a sponsor, sparking immediate backlash.

Sustainability activists accused the UN of "greenwashing" for inviting a company responsible for significant plastic pollution. According to data from the Organisation for Economic Co-operation and Development (OECD), plastic pollution accounts for 3.4% of global emissions. A petition signed by 240,000 people called for Coca-Cola's sponsorship to be revoked, but it ultimately failed.

In an open letter, at least 60 public health organizations called for an end to "corporate capture" of polluting companies in climate negotiations. Coca-Cola told PBS that its participation underscored the company's commitment to reducing emissions.

The petition and the attention it drew brought into focus the deep rift between advocates warning of imminent climate collapse and the food industry.

In response to growing pressure from sustainability advocates and consumers, food and beverage companies have developed plans aimed at reducing greenhouse gas emissions from their supply chains over the next decade. But experts point out that whether companies can make substantial progress is a major question.

Some companies, such as Mars, have demonstrated commitment by saying they will tie executive compensation to achieving emissions targets. Three major consumer goods giants—Mars, PepsiCo, and Nestlé—all told Food Dive they are on track to meet their respective emissions reduction goals and plan to make substantial progress in 2023.

While some experts believe consumer goods companies' efforts so far are a step in the right direction, they doubt the industry can meet time-based targets in the coming years. This could intensify pressure from activists, who blame food and beverage producers for a large share of the climate crisis. According to UN statistics, the food industry accounts for one-third of global greenhouse gas emissions.

Jim Walsh, policy director at the sustainability advocacy group Food & Water Watch, said the industry's current efforts will not produce meaningful results in curbing emissions. "This is really big agriculture running a marketing campaign to 'greenwash' the destructive global food system."

Consumer goods companies seek carbon sequestration

According to emissions measurement company Net0, at least 110 countries have agreed to achieve net-zero emissions by 2050—meaning emissions are balanced with the amount removed from the atmosphere. This will require countries, companies, and consumers to make large-scale changes to how food is produced and consumed.

Marketing and new product development have become key components for consumer goods companies to communicate their carbon reduction ambitions to consumers. Some brands—whether traditional products like Bud Light or new market entrants like Neutral Milk—have launched carbon-neutral products claiming to offset all greenhouse gases emitted during production. This typically involves companies purchasing carbon credits or investing in carbon offset projects, such as replanting trees in areas affected by deforestation.

Sean Hiatt, associate professor at the University of Southern California's Marshall School of Business, said reliance on carbon offset credits could prove to be an ineffective measure and raise questions about its credibility. "I think they're going to create a reputational threat for themselves because people are going to say it's 'greenwashing,'" Hiatt said. "It's under-regulated, so the risk is higher."

Companies are also embracing carbon "insetting" projects—such as restoring forests and agricultural land—which do not involve purchasing carbon credits but are about "doing more good rather than less bad," according to the World Economic Forum.

Focus on regenerative agriculture

The industry distinguishes between Scope 1 and Scope 2 emissions—those from a company's own operations and facilities—and Scope 3 emissions, which arise from indirect sources such as producers it sources from and product transportation. According to sustainability nonprofit Ceres, Scope 3 emissions account for 90% of food companies' emissions.

In most food companies' emissions targets, "regenerative agriculture" takes center stage as a key solution. These practices are a set of farming techniques adopted by farmers to restore the soil and water used in production. According to the Chesapeake Bay Foundation, these practices include cover crops, continuous no-till, and crop rotation. According to Colorado State University, tillage erodes microorganisms in the soil, harming its biodiversity and overall health.

But not all agricultural experts agree with this approach. Walsh of Food & Water Watch said no-till farming requires significant pesticides and chemical fertilizers, making it more harmful than beneficial. "These companies use the term 'regenerative agriculture' loosely, and because there's no clear definition, it allows them to justify absurd and harmful practices that provide almost no climate benefit."

While some practices under "regenerative agriculture" may be beneficial, Tara Chandrasekaran, senior ESG analyst at sustainable investor group FAIRR, said companies must be more transparent about the extent to which they believe regenerative practices can reduce emissions. She said Nestlé is one company that was fully candid in detailing how its practices would reduce emissions in a lengthy "Net Zero Roadmap" document published in 2021.

"For these actions to be robust and credible, companies must both measure and disclose the extent to which these practices can mitigate emissions," Chandrasekaran said. "The main concern with soil carbon sequestration is the extent to which it can adequately sequester carbon, which can vary by region and soil type."

Nestlé, the world's largest food company, said it has adopted a combination of techniques to achieve its goal of halving absolute emissions by 2030. These measures include regenerative agriculture practices and insetting projects. The consumer goods giant said individual brands in its portfolio can offset emissions by purchasing carbon credits.

In an email statement to Food Dive, Nestlé said one of its brands embracing reduced soil tillage is pumpkin producer Libby's. The company said it is working with third-party organization Sustainable Environmental Consultants to collect and measure agricultural data to assess its emissions.

"By adopting sustainable reduced tillage practices, compared to conventional tillage, Libby's farmers saved the equivalent of about 43 dump trucks of soil—694 tons of soil per year—from being lost to erosion in the first year of data collection," Nestlé said. "We are leveraging our scale and global reach to find innovative ways to harness farmers' unique expertise in the field and work with third-party experts and industry leaders to ensure our efforts are effective."

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"For reduced tillage of row crops, there is no definitive conclusion on whether it can achieve the carbon storage effects often claimed."

Jason Hill

Environmental expert and professor at the University of Minnesota

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Candy giant Mars Wrigley—which has committed to achieving company-wide net-zero emissions by 2050—said it is on track to meet its goal of reducing total operational emissions by 42% by the end of 2025, based on its work in eliminating deforestation and adopting "climate-smart" agricultural practices, especially in cocoa.

"We have many forward-looking projects, such as our farm-level cocoa initiatives at Mars La Chola in Ecuador and Bacao Farm in Colombia, where we optimize fertilizer and water inputs, use renewable energy, and harness the power of trees to sequester carbon in soil and biomass," Chief Sustainability Officer Alastair Child said in an email statement to Food Dive.

Beverage and snack giant PepsiCo views its regenerative agriculture approach as key to transforming its supply chain and achieving its goal of net-zero emissions by 2040. Roberta Barbieri, vice president of sustainability, said in an email statement that the company believes it has a solid foundation to continue advancing emissions reductions in 2023.

Some new initiatives the company has adopted include: decarbonizing a snack factory in the Netherlands by storing and converting renewable energy; and installing a biodigester—which breaks down substances like fats and oils—at a PepsiCo plant in Portugal.

But Barbieri said there are difficulties in getting supply chain partners to deploy new technologies that require greater investment. Another challenge the company faces in achieving its regenerative agriculture goals is the ability to manage data on project progress, which she said still has room for improvement.

"Beyond some large suppliers, addressing climate change requires broader education and capacity building," Barbieri said. "Small and medium-sized suppliers also struggle with a lack of personnel needed to lead changes at the required scale."

Skeptics raise questions

While companies focus on these goals, experts doubt whether companies can achieve them within the expected timeframe, as global supply chains require significant and costly reforms.

Jason Hill, environmental expert and professor at the University of Minnesota, said some practices under the "regenerative agriculture" umbrella are questionable. First, the term itself faces "greenwashing" accusations from some activists due to its lack of a clear definition. Additionally, there are questions about whether farming methods reduce emissions as significantly as the industry claims.

"For reduced tillage of row crops, there is no definitive conclusion on whether it can achieve the carbon storage effects often claimed," Hill said.

According to the UN Food and Agriculture Organization, the meat and dairy industry accounts for 14.5% of anthropogenic emissions. The industry has drawn particular scrutiny for producing methane, which, according to the Environmental Protection Agency, is a greenhouse gas at least 300 times more potent than carbon dioxide.

FAIRR, a sustainable investor group tracking livestock company emissions, said meat giant Tyson will fail to meet its goal of reducing emissions by 30% by 2030. FAIRR said the target is outdated compared to its peers, and emissions from its operations have increased by 7% against the baseline target. Tyson said in a 2021 statement that it plans to update the baseline of its emissions target by the end of 2023.

To track emissions, many companies rely on third-party organizations for an accurate picture of their carbon output.

Climate Trace, a nonprofit tracking livestock company emissions, said companies struggle to determine progress on their emissions targets due to a lack of accurate data sources to judge whether companies are successful. The nonprofit estimates farm emissions by calculating methane from cattle burps and manure, rice cultivation, and synthetic fertilizer application.

"The Environmental Protection Agency does not regulate or monitor greenhouse gas emissions from animal feeding operations; in fact, it doesn't even have a complete list of feeding operations nationwide," said Leka Sridhar, partnerships manager at Climate Trace. "We apply satellites, other remote sensing technologies, and artificial intelligence to independently observe global emissions, in as much detail as possible."

Can policymakers and investors force industry action?

While consumer goods companies express confidence in their ability to reduce emissions, sustainability groups argue this is not enough. These groups strongly advocate for US lawmakers to regulate the carbon footprint of large food companies.

New Jersey Democratic Senator Cory Booker introduced a bill in 2021 aimed at reforming the agricultural system to improve its sustainability.

Walsh said passing Booker's bill is the primary measure Congress can take to both reduce industry emissions and add more structural security to the supply chain during a time of crisis—especially regarding factory farm systems.

"Factory farms are creating an unsustainable food system that is less resilient to various supply chain shocks," Walsh said. "When there are massive agricultural entities and large food giants, a problem within one of these institutions can have ripple effects globally."

FAIRR and its network of investors representing $70 trillion in assets believe its reporting on supply chain carbon emissions can be used by investors as a tool to pressure companies into setting stronger emissions targets, said Talia Wronaki, senior manager of research and engagement at FAIRR. "We have this information, and the dataset is available for investors to use in their respective engagement activities."