Katharina Cavano l Palladium - Mar 22 2023
Grocery Stores Need to Green Their Supply Chains – Here’s Where to Start

The global food system emits about a quarter of all greenhouse gas emissions. But beyond being a critical driver of climate change, the way we grow our food simply requires a massive amount of land. Half of the world’s habitable land is used for agriculture (including many areas that were once covered by forests and wildlands), significantly reducing the world’s biodiversity.

It’s past time for grocery stores to start greening their supply chains, but where do they start? Last year, the Science Based Targets initiative (SBTi) launched their food and land use guidance, which stipulated that those organisations signed up must reduce their emissions by 3% every year until 2050.

To build on that guidance beyond emissions, the Science Based Targets Network (SBTN) recently released draft technical guidance to help equip companies to set the first land science-based targets, with a focus on the protection and restoration of ecosystem and farming’s impact on nature.

For Tom Gegg, a Project Developer in Palladium’s Nature Based Solutions team, it’s a step in the right direction. “As part of this guidance, they’re asking the food processing companies and supermarkets that sign up to the targets to do three things: stop the conversion of natural ecosystems for agriculture, reduce the footprint on land, and engage with the landscape.”

Essentially, Gegg says, it means that agriculture can expand no further, that organisations must focus on getting more efficient in order to reduce the amount of land they’re using, and once reduced, engage with groups working in key landscapes in their supply chains to restore biodiversity.

“The interesting thing is the nuance there at the end,” he says. “Basically, they’re asking organisations to find the landscape where they have done the most damage and fund reparation work there.”

Both the SBTi emissions guidance and the new guidance for nature, if fully implemented. would lead to a marked shift in how we think about addressing the environmental costs of food production. Both sets of guidance encourage a strong focus on addressing the emissions and nature impacts within companies’ supply chains. This means that any carbon or biodiversity credits bought by food companies should be coming from landscapes within their own supply chains - as a means of funding work to address the emissions and nature loss associated with food production. 

“Expectations are being ramped up for supermarkets and commodity traders around emissions and nature – and not just via voluntary guidance but also new regulations, like the EU’s new anti-deforestation laws and the UK’s due diligence law for commodities,” Gegg explains. “These companies are increasingly being expected to work with their supply chains to address and compensate for environmental liabilities, and they can’t do so by simply buying random carbon or biodiversity credits from elsewhere in the world.”

He explains that SBTN’s guidance, once publicly reviewed and agreed, will play a vital role in shifting responsibility to those organisations doing damage to take on liabilities within their own sector. And while this shift is yet to come, he notes that it matches well with what he already is observing. “The trend I really see is that people and organisations are less impressed by those trying to compensate for damage they create in, let’s say, the UK, by purchasing credits from a project in Peru.”

But it won’t be without barriers.

As with any environmental liabilities, there’s the matter of tracking and measuring, a factor that’s further complicated by scope 3 emissions. “First, these organisations must trace the liabilities in their supply chain,” Gegg adds.

“They can track where the food comes from, they just need to also start tracking the problems that come with it.”

With those problems also comes a price tag. Another question mark looms over the impending guidance from SBTN: who will pay for it? As many countries around the world experience a cost-of-living crisis, the threat of increased prices on food could cause a backlash from customers.

For now, the guidance is yet to be finalised and, like the Science Based Targets initiative, will be voluntary for organisations. However, the framework it sets out will be a critical step towards net zero for one of the most difficult to abate sectors: food and agriculture.

For more, read 'This will Mean Stopping Deforestation' or contact info@thepalladiumgroup.com.