The economic effects of the Russian invasion of Ukraine will likely ripple for years, if not decades. Global food systems have not been spared from disruption, as the war has pushed the price of wheat and other commodities to their highest in years. This disruption, like that from the pandemic, highlights some of the risks built into our highly efficient, trade-dependent food supply chain. And yet these risks run far wider than recent events, as the climate crisis is causing food companies to face the very real possibility of losing access to basic products.
Last fall’s severe droughts and flooding in Western Canada were a stark reminder that we need to build more resilience into the food system. B.C. farmers lost more than 600,000 animals as well as crops and costly electrical infrastructure to the floods. In the Prairies, many ranchers, unable to pay escalating costs for hay, were forced to cull their herds. Harvests of field crops such as wheat, canola, barley and peas saw a decrease of 36% from the prior five-year average, forcing grain companies like Viterra and Richardson to pay prices far above their export value and farmers who’d pre-sold their harvests to swallow the costs. Climate-related events like this across the globe are only beginning to ripple into markets and food prices, but the time to act is now.
A number of food companies are stepping up to the global climate change effort, including a handful of Canadian ones, but the large majority have yet to take meaningful action. Most companies support a range of sustainability projects (reducing plastic bag use, promoting local food) and make a variety of claims using buzzwords like “natural” or “green,” but without credible, internationally recognized, third-party standards and verification, the threat of greenwashing looms large.
Food production and agriculture need a different set of standards than other industries, so the Science Based Targets initiative (SBTi) is currently developing specific guidance to support food companies with land-related emissions in setting their targets, aligned with the global carbon accounting standards of the Greenhouse Gas (GHG) Protocol. The Value Change Initiative works with companies, civil society actors and internationally recognized frameworks to define how to address and account for GHG emission reductions across global value chains. It recently launched a Food & Agriculture Working Group focused on removing barriers to reducing Scope 3 emissions (indirect GHGs from a company’s supply chain rather than its operations and energy use) in agricultural value chains.
Sustainable supply chain standards and guidance for food and agriculture companies are currently evolving, meaning that the plane is being built as it flies. Pressure from consumers and investors is mounting for food companies to take credible climate action. For example, a Ceres investor-led initiative is pushing 50 high-emitting food companies to improve their GHG emissions disclosures, set ambitious emission reduction targets, and implement ambitious climate-transition action plans.
Globally, more than 1,000 companies have signed up to the SBTi. In Canada, 48 companies and small and medium enterprises have agreed to it. But just a handful of Canadian food companies have committed to the process so far, and many corporations are simply not disclosing their emissions.
Without credible, internationally recognized, third-party standards and verification, the threat of greenwashing looms large.
Once companies have had their targets approved, they calculate their baseline GHG emissions and the most effective routes to reductions. Emissions are divided into Scope 1 (emissions from sources owned or controlled by the company), Scope 2 (indirect emissions from purchased electricity, steam, heating or cooling consumed) and Scope 3. Under the SBTi, the bulk of companies’ reductions toward net-zero targets have to come from insetting (reducing emissions within their own value chains) as opposed to offsets purchased from GHG reduction projects elsewhere.
In the food sector, more than 80% of emissions typically come from supply chains. While it makes sense for companies to start by reducing emissions in their own operations, changing all their lightbulbs and electrifying their vehicle fleets won’t get them close to their targets. They need to examine their supply chains to find the big cuts. Heavy emitters in agriculture include nitrogen fertilizers, which emit nitrous oxide (a GHG about 300 times as potent as carbon dioxide), and the methane emissions from manure and cows burping (more than 25 times as potent as carbon dioxide).
The good news is that it’s not only possible to significantly reduce on-farm emissions, but that farms have a great potential to pull carbon down from the atmosphere and sequester it in the soil. They can do this with regenerative practices such as growing “cover crops” that prevent soil erosion and increase soil fertility between the cash crops, reducing soil disturbance (by reducing or eliminating tillage) or managing nutrients to reduce GHG emissions from products like nitrogen fertilizer.
Early studies suggest that farmers using such techniques can increase profit margins by as much as 30%, but only after at least two to six years. In general, they will need support from supply chain partners, governments or others during the transition years. This is beginning to happen in Canada, with programs like McCain’s target of transforming all the farms it sources its potatoes from to regenerative agricultural practices by 2030, using principles including minimizing soil disturbance, enhancing crop and ecosystem diversity, reducing agro-chemical impacts, and integrating organic and livestock elements. Another example is General Mills’ goal to convert one million acres of land into regenerative operations, including through a pilot project with 45 oat farmers in North Dakota, Saskatchewan and Manitoba.
The even better news is that regenerative farming not only sequesters carbon, but builds healthy soils, increasing resilience to our increasingly erratic climate. Planting cover crops and reducing tillage can build soil structure, increasing its capacity to absorb water. This both reduces runoff during floods and saves moisture for times of drought.
Canada’s potential to reduce GHG emissions with agricultural natural climate solutions is strong, and companies play a critical role in incentivizing change within their supply chains. The risk to their own supply chains and the planet is too high if they don’t take action.
Beth Hunter develops food and agriculture initiatives across Canada and is Nature United’s agriculture program advisor.