Duncan Rawson and Peter Wortsman, EFFP Partners.

The challenge of food companies addressing scope 3 emissions back to the farm.

In the global fight against climate change, the role of companies, especially those in the food industry, is under increasing scrutiny. While many are taking steps to reduce their carbon footprint, addressing Scope 3 emissions—especially those stemming from agricultural practices—poses a unique challenge. Compounded by short-term business cycles, food companies find themselves at a critical juncture, needing to prioritise long-term sustainability over immediate gains.

Scope 3 emissions, particularly those originating from agricultural activities, significantly contribute to food companies’ carbon footprint. Over 71 percent of total Scope 3 emissions stem from farming[1]. Only focusing on Scope 1 and 2 emissions is like moving the deck chairs on the Titanic.

Worse, in 2023, CDP[2] reported that half the companies reporting on their supply chain emissions reduced their Scope 1 and 2 emissions but saw their Scope 3 emissions increase.

Yet, the imperative for short-term profitability and dealing with immediate supply challenges often clashes with the investments and time required for implementing sustainable practices.

One of the most pressing challenges food companies face is the pressure of short-term business cycles. Quarterly earnings reports, shareholder demands, and market fluctuations drive decision-making, often prioritising immediate financial returns over long-term sustainability. Transitioning to regenerative agricultural practices, which offer benefits such as improved soil health and carbon sequestration, requires upfront investments and a willingness to forgo short-term profits for future gains—a problematic proposition for companies accustomed to prioritising quarterly results.

Furthermore, the complexity of agricultural supply chains exacerbates the challenge of addressing Scope 3 emissions. Food companies rely on a network of suppliers, farmers, and distributors, each with their own priorities and incentives. Aligning these disparate stakeholders towards a common sustainability goal requires collaboration, transparency, and a shared vision for long-term change. However, fostering such collaboration proves challenging in an industry driven by competition and cost-cutting.

Despite these challenges, there are signs of progress within the food industry. Some companies are recognising the importance of addressing Scope 3 emissions. Indeed, many companies EFFP is working with are taking proactive steps to integrate sustainability into their business strategies. Initiatives such as sustainable sourcing programs and regenerative agriculture partnerships are gaining traction and demonstrating a commitment to long-term environmental stewardship.

In conclusion, addressing Scope 3 emissions back to the farm is a critical issue for food companies navigating short-term business cycles. While the road ahead may be fraught with obstacles, it’s imperative that companies prioritise long-term sustainability if they wish to reduce the negative impacts on their business shaped by an increasingly volatile climate.

Of course, it is not just about Scope 3 emissions. We are growing food in an increasingly volatile climate. With more extreme weather, crop failures will be more common. Investing in healthier soils will make yields much more predictable in extreme weather conditions, ensuring profits and, more importantly, future food production.

By investing in regenerative agricultural practices, fostering collaboration across the supply chain, and embracing transparent reporting standards, food companies can play a pivotal role in building a more sustainable future for all.

If you want to learn more about how EFFP can help you realign your priorities and deliver meaningful reductions in Scope 3 agricultural emissions, get in touch.

Isn’t it about time you thought more long-term to secure a more resilient, sustainable, and profitable future?

[1] Science Direct

[2] Carbon Cloud

Featured photo by: Aron Visuals on Unsplash