Investor Engagement Network Climate Action 100+ Targets Food & Beverage Sector Supply Chain Emissions
Climate-focused investor engagement initiative Climate Action 100+ set its sights on the food and beverage sector, with the new release today of a set of recommended investor expectations for the sector for actions necessary to facilitate the transition to a net-zero economy.
Climate Action 100+ is an initiative, with over 600 investors representing more than $55 trillion in assets, that targets the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change and align their business strategies with net zero in order to help limit average global temperature rise to 1.5 degrees Celsius.
The new guidelines form part of Climate Action 100+’s Global Sector Strategies, an approach recently launched by the initiative, focusing investor engagement strategies for decarbonization at the sector level, targeting high-emitting sectors, and aiming to foster investor-led sector-level dialogue on reaching global climate goals.
Food and beverage sector emissions account for about a third of global GHG emissions and are among the most difficult to address, with the vast majority coming from the supply chains of food and beverage companies, rather than from “direct” emissions from the companies’ operations. According to Climate Action 100+, in order to meet science-based emissions reduction targets, individual companies and the sector as a whole will need to address emissions from areas including agriculture and land use, with a total reduction in land-based Scope 3 emissions of 85% necessary top reach net zero by 2050.
Fiona Reynolds, PRI CEO and Global Steering committee member of Climate Action 100+ said
“The scale of the food and beverage supply chain means that the sector faces extensive challenges around addressing emissions and moving towards net-zero. We’re encouraging companies in the sector, and investors working with those companies, to be aware of and take action on addressing emissions throughout these supply chains.”
Key action areas with the greatest potential for addressing emissions impact include eliminating deforestation, restoring previously cleared land, and employing agricultural practices that mitigate and sequester carbon.
Some of the key expectations for the food and beverage companies outlined in the strategy report, include integrating supply chain climate action into corporate decision-making processes and procurement policies and incentivizing agricultural producers to reduce the climate impact of crop and livestock production, and enhancing agricultural carbon sequestration. The strategy also promotes the alignment of company CAPEX, product development, and R&D with a 1.5-degree scenario, along with clean energy and transport use, and practices aimed at reducing food loss, among others.
The new expectations come weeks after the release of IPCC’s landmark report that warns that the planet is at risk of failing to achieve the goals of the Paris Agreement and the necessary reductions in greenhouse gas emissions are needed.
Natalie Wasek, Shareholder Advocacy Manager at Seventh Generation Interfaith Coalition for Responsible Investing, added:
“Because the food and beverage sector is behind over a quarter of total greenhouse gas emissions, the companies have not only the responsibility but opportunity to reduce these emissions. Investors have urged companies to adopt reduction targets, but without full sector and supply chain collaboration, the decarbonization transition has not been possible. Investors are looking for action plans to hold these companies accountable for reaching their targets. The Climate Action100+ initiative can help make this happen.”
The investor expectations were developed by Ceres and PRI, two of the founding investors networks of the Climate Action 100+ initiative, and follows the launch last month by Ceres of Food Emissions 50, a new initiative to lead institutional investors to engage the highest greenhouse gas (GHG) emitting companies in the North American food sector to disclose and reduce GHG emissions.
Climate Action 100+ has released sector strategies for the steel and aviation industries, with plans for future strategies targeting other high emitting sectors such as electric utilities, trucks, and diversified mining.