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Supply chain emissions are top of mind for food and ag

In Q2 what are the big food players focusing on and what does that mean for the sustainability of our food system in the future?

Truck on crops

Scope 3 emissions are notoriously difficult to reduce since they’re outside a company’s direct control. Image via Shutterstock/Ink Drop.

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Today, I'm turning my attention to larger players in food and agriculture. What were their noteworthy accomplishments in the second quarter of this year?

What stands out is their continuing focus on supply chain work. This makes sense as most emissions in the food and agriculture industry occur at the farm level. Besides managing emissions, companies have also worked to improve socioeconomic outcomes in the food system and integrate new technologies into their manufacturing and retail operations. 

Getting to the root of greenhouse gas emissions 

Scope 3 emissions are notoriously difficult to reduce because they’re outside a company’s direct control. Progress requires understanding supplier needs and motivations and developing scalable incentive systems in response. Last quarter has seen many such attempts. 

The first tactic evolves around financial incentives. Money makes the world go around and the supply chain world is no different. Companies from Cargill to Arla and Nutrien are paying a growing number of farmers to implement sustainable practices. Projects launched in the past quarter include soil health incentives for Cargill’s U.S.-based cotton growers, a reward program for lower-emissions milk targeting Arla’s European dairy farmers and Nutrien’s sustainable nitrogen program that requires producers to cut nitrogen use by 5 percent. 

Programs such as these can significantly move the needle on sustainability because they create large-scale demand for climate-friendly products and support farmers in implementing respective practices. But as more companies develop proprietary regenerative programs, it may become challenging for farmers that supply more than one company to manage and meet the varying requirements. Because of this, I hope that we will see more collaboration between companies supporting regenerative practices to streamline farmer asks and benefits in addition to monitoring programs. 

UK retailer Tesco adopted a slightly different approach. It partnered with World Wildlife Fund (WWF) to run an innovation accelerator program that matched startups with longstanding suppliers to pilot and scale innovative sustainability solutions. Over 70 startups applied to the program, and eight finalists entered the pitch competition. 

Winning solutions included AgriSound, a startup using sensors to monitor farm pollinators and clean tech companies CCm Technologies and Andermatt, which produce low-carbon fertilizer from industrial waste materials. They will work with Tesco’s fruit and potato suppliers to improve production. This approach allows the retailer to help build out the missing links between entrepreneurs and seasoned producers, bringing climate tech into action. 

With General Mills' investments, the CPG giant aims to promote racial and gender equity in the food industry by furthering opportunities for minority and female entrepreneurs

In yet another attempt to reduce Scope 3 emissions, PepsiCo started collaborating with Schneider Electric to provide its suppliers with greater access to renewable electricity. PepsiCo hopes to educate suppliers about renewable electricity and accelerate the transition by facilitating aggregate power purchase agreements (PPAs) and other forms of renewable procurement. If the program advances as planned, it will finalize a first buyer’s cohort for an aggregate PPA by the end of this year.

General Mills, Nutrien and Mars catch up on social goals 

In addition to reducing supply chain emissions, companies have worked to advance their social impact goals.  

In April, General Mills invested a combined $15 million into Fearless Fund and Supply Change Capital, two early-stage and women-led venture capital funds. With these investments, the CPG giant aims to promote racial and gender equity in the food industry by furthering opportunities for minority and female entrepreneurs. Nutrien also took a step toward supporting minority entrepreneurs by launching an inclusion challenge with Radicle. It will invest $250,000 into two early-stage ag or food technology companies led by entrepreneurs who identify as female or BIPOC or belong to a historically underrepresented demographic in the industry.

In a more extensive attempt to improve equity and inclusion in the food system, Mars launched two new programs aiming to enable 14,000 smallholder cocoa farms in Ivory Coast and Indonesia to earn a living income by 2030. The programs improve farmers' access to finance and help them adapt to climate change. This work will include interventions such as access to below-market-rate loans and mobile banking, implementation of agroforestry practices and income diversification measures. 

But it’s not all rosy regarding workers in food and ag. Starbucks and Amazon continue to deal with their worker’s unionization pushes and will need to figure out how to create better conditions for these essential staff members. I’ll continue to track how companies integrate social goals into their sustainability programs. 

A glimpse into the future

Technology advances are another way for companies to mitigate workforce issues. Q2 came with more updates that bring science fiction into reality than I can summarize, but I’ll share my three favorites:

  • Whole Foods shoppers in Austin can pay for groceries by scanning the palm of their hand at checkout. 
  • John Deere is quickly advancing its autonomous tractors by improving sensing with artificial intelligence. Watch out on those country roads. 
  • Unilever launched a pilot with drone-delivery service Flytrex to offer flying ice cream deliveries in under 3 minutes from its virtual store.  

While not all of these innovations clearly contribute to a better world, it will be interesting to see how they will play out further, influencing jobs and consumer behavior.

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