Agriculture is not just one of the leading contributors to climate change – accounting for a third of global GHG emissions – it is also increasingly exposed to the impacts of global warming-driven floods, droughts and wildfires. The Asian Development Bank reported that, between 1961 and 2021, climate change reduced global agricultural yield by 21%. To enhance supply chain resilience and mitigate financial risks related to climate change, food companies must find ways to cut emissions, and fast.
For many companies in the food and beverage sector, the key to cutting emissions lies in their supply chains. Jon Hixson, chief sustainability officer at KFC, Pizza Hut and Taco Bell’s parent company Yum! Brands, says: “We’re investing in sustainable agriculture practices because we know that makes our supply chains more resilient and benefits nature.”
A new report
from Ceres, the sustainability non-profit, lays out some of the most promising ready-to-deploy and emerging innovations that companies are using to tackle the main sources of the food sector’s agricultural emissions. These include methane emissions from raising livestock and growing rice, nitrous oxide from applying fertiliser to fields, and the use of fossil fuels to power farm equipment.
Hard to abate
Agriculture, which accounts for 40% to 60% of the food sector’s emissions, is considered a “hard-to-abate” sector because cutting agricultural emissions requires, in many ways, a fundamental restructuring of the entire food system and its complex structure of global supply chains. And this must happen at the same time as global food demand is growing, dietary habits are changing, and an increasingly hostile climate is already impacting agricultural yields.
While companies can and should speed the development and adoption of existing emissions-reducing innovations, such as regenerative agriculture practices to increase soil carbon, even widespread adoption of these practices won’t be enough to limit global warming in line with a 1.5°C future by 2030, the goal of the Paris Agreement.
“Innovation is key for food companies to deliver the emissions reductions necessary to meet their commitments by 2030 and reduce climate risk for the sector,” says Meryl Richards, program director, food and forests, at Ceres. She says that Ceres’ recent Food Emissions 50 benchmark shows many of the largest food companies are not yet embedding emissions reductions within decisions about long-term investments and product innovation. “Our new report helps companies understand the solutions available to accelerate innovation both within their supply chain and sector wide.”
More innovative solutions are needed. But many of the technologies needed to close the emissions gap do not yet exist or are still very early-stage. To bring them to commercial scale, they need investors and companies to support their development, through pilot projects and early-stage trials. While farmers and ranchers can take many measures to cut emissions themselves, many solutions must be developed off-farm, such as developing feed additives to cut cattle methane emissions.
Supporting these technologies is a win-win scenario for companies in the sector. It will help them to mitigate systemic risks and adapt to the physical impacts of climate change, while also making farms more resilient to those impacts. It will also increase agricultural productivity, stabilise commodity prices and create new business opportunities.
If research is too early-stage and risky for companies to do themselves, they can call for more funding for public research agencies, which are better placed to conduct basic and high-risk research, join public-private partnerships, and push for efficient and safe regulatory processes to approve new technologies.
Sectoral initiatives facilitate peer-to-peer learning, collaboration, and pooling of resources to support promising solutions. One example is Ceres’ climate-smart agriculture and healthy soil working group, which pushes for rules and regulations to advance climate-smart agriculture practices in the US. Another is the SAI Platform, which brings together over 170 global food and agriculture companies and industry groups to take part in sustainable agriculture projects around the world.
Companies are also starting to pool resources to support start-ups working on emissions reduction technologies. For example, in 2018, Anheuser-Busch InBev, Coca-Cola, Colgate Palmolive and Unilever launched the 100+ Accelerator, which invests up to $100,000 in individual start-up companies to pilot, test and scale solutions for the global food and packaged goods industries. “Cross-sector collaborations play a key role in these efforts, helping to identify new innovations and technologies that can be scaled more broadly throughout our supply chain,” Yum!’s Jon Hixson says.
Collaboration is crucial
Public-private partnerships are another low-risk way to support high-priority innovations. In the US, companies can participate in partnerships such as Foundation for Food and Agriculture Research (FFAR), whose research includes developing next generation crops with environmental benefits. The Greener Cattle Initiative, a research consortium situated within FFAR, is addressing issues such as methane emissions from beef and dairy livestock production. Its members include Archer Daniels Midland, Nestlé and JBS USA, as well as the Innovation Center for US Dairy and the New Zealand Agricultural Greenhouse Gas Research Center. Globally, AIM for Climate, a joint initiative by the United States and the United Arab Emirates, is also researching these emissions.
One barrier is that some innovative technologies require additional regulatory approval even for small-scale pilots. For example, in the US methane-inhibiting feed additives are currently subject to the FDA’s drug approval process, which can take up to 10 years and cost around $30m. Some sector experts suggest that the federal government should consider following the lead of the European Union, which has a faster approval process for products with potential high environmental benefit.
Methane-inhibiting feed additives are one emerging technology that is further along in the innovation pipeline, but still needs more research and testing to achieve wider market adoption. Food companies can help by using their in-house R&D facilities to test lower emission ingredients and by testing the performance of new technologies within their own supply chains.
Consumer goods companies such as General Mills and Patagonia have started using Kernza, a perennial wheat variety that improves soil health, helps to sequester carbon and limits runoff, reducing the need for tillage and replanting. Kernza needs more research to help improve yields and make it more competitive with conventional annual grains. By using Kernza in their products, firms can help raise awareness for the crop and drive further investment towards its breeding program.
Reduce the risk of new technologies
Agriculture is often a word-of-mouth business. As farmers benefit from new technologies, they may convince others to try them. Corporate pilot projects can amplify this process by cutting the risk of testing new practices or technologies. For example, DSM-Firmenich’s Bovaer was trialled on 158 dairy farms in the Netherlands for six months and was found to cut enteric methane emissions by 28% on average.
Some of the sector’s biggest companies have their own corporate venture capital units, which can invest in emerging low-emission technologies. These investments can be crucial to develop solutions that are too risky or too far from commercial adoption to start developing or testing in-house.
Corporate VC units can also help to scale market-ready but early-stage products. One example is Tyson Foods’ investment arm Tyson Ventures, which invests in areas including alternative proteins, and traceability and automation technologies. One of its portfolio companies, Athian, is developing a cloud-based platform that allows livestock producers to benchmark their operational footprint and on-farm emissions reductions. Other investments have included cell-based and cultivated meat producers Upside Foods and Believer Meats.
Cutting emissions from agriculture is vital for the environment and for the future business viability of farmers and the agri-food sector. It will not happen without further innovations – thankfully companies have a range of options to help bring these to market.
This content is supported by Ceres. Read Ceres’ report, Cultivating Innovation: Practical Solutions for Companies to Reduce Agricultural Emissions, here.