With this year’s UN Climate summit reviewing for the first time whether the Paris Agreement mechanism is working, it’s a chance for businesses to revisit their own commitments and progress in the race to net-zero. More than 1,550 companies have now committed to science-based targets of some kind, including Unilever with a commitment to hit net zero by 2039, and Nestlé by 2050. But as illustrated in Ceres’ recent Food Emissions 50 benchmark, many are struggling to get a hold of reporting and acting on these commitments.
This specifically relates to the complexity of quantifying Scope 3 emissions. These make up the bulk of our carbon footprints and are therefore key to achieving net-zero, but are also the area which businesses have least control over. So if you have a GHG reduction target of say 25%, how can you achieve this if you can’t see where in your supply chain the emissions are coming from?
It requires looking at the carbon footprint of a bag of cocoa powder or coffee for example, not only on its journey through transport and processing, but right back at the source – on the farm where the beans were grown. Yet, acquiring this level of traceability is extremely difficult because of the often fragmented nature of supply chains, particularly in emerging markets, where cash crops like coffee, cocoa and cashew are predominantly grown by smallholder farmers in remote areas, and can change hands through multiple intermediaries before reaching your door. This makes accessing the granular data needed to monitor Scope 3 emissions a significant challenge.
It is this data that OFI’s (Olam Food Ingredients¹) 6,292 enumerators collect on the ground across our cocoa, coffee, nuts and spices supply chains and feed into our sustainability insights platform AtSource. It allows us and our customers to track environmental (as well as economic and social) metrics from farm to factory, including the emissions linked to land-use change, fertiliser and pesticide use, irrigation, and for some products, the amount of carbon sequestered in soil and trees. It gives customers access to a single ‘ESG view’ across their supply chain, uncovering emission hotspots that inform where reductions and removals would be most impactful.
If we look at arabica beans that we source from Tolima in Colombia, and ship to a US roaster in New Jersey, we can see – using the environmental footprint calculator – that this supply chain generates 8 tonnes of CO2 equivalent (per tonne). And looking closer at the breakdown, 98% of that comes from on-farm activities, namely crop residues, land-use change and fertiliser use. Based on this footprint, customers can then work with us to improve the CO2 intensity of their coffee from targeted interventions. In this case, these should focus on scaling up training on Good Agricultural Practices (GAP) including organic composting, proper fertiliser management, and agroforestry practices that restore lost vegetation and sequester carbon.
Crucially, the data on AtSource can be used by our customers to assess the progress of their own sustainability priorities and ESG reporting, as well as in submissions to third-parties, like the Climate Disclosures Project (CDP) – the global disclosure system for investors, companies, cities and states to manage their environmental impacts. This requires detailed disclosure on climate, water and forest footprints, which Olam has reported to the CDP for ten years.
We are now building on the insight AtSource provides to go a step further by calculating the potential carbon reduction available in our supply chains. As part of a ‘Circular coffee’ project with a customer, that’s working to improve environmental conservation in the producing region of San Martín, Peru, we have used AtSource data as a baseline to work out that the total carbon emissions in this supply chain can be reduced by as much as 46%. And that this can be achieved with three specific types of on-farm interventions: improved nutrient and soil fertility management, planting 334,000 trees over 2,700 hectares, and avoiding deforestation. Additional interventions are also modelled to drive yield increases for the 1,500 coffee farmers involved, to ensure high adoption rates of these climate-smart practices.
We recognise the challenge of tackling Scope 3 emissions, but with the demands on businesses to account for their carbon only getting stronger, the need for transparent, traceable supply chains is more vital than ever. The granularity of the data and visibility into the good and bad in our supply chains means AtSource is positioned to support sustainability reporting and inform meaningful action to fast-track our journey together towards net-zero
¹ OFI is a new operating group born out of the reorganisation of the Olam Group. OFI offers sustainable, natural, value-added food and beverage ingredients and solutions so that consumers can enjoy the healthy and indulgent products they love. It consists of Olam’s industry-leading businesses of Cocoa, Coffee, Nuts, Spices and Dairy