Nonprofit Ceres Encourages Investors To Use Their Proxy Votes To Reduce Emissions By Launching Food Emissions 50 Focused On The Food And Farming Industry.
The food and farming industry is coming under increased investor scrutiny regarding global greenhouse gas emissions.
Ceres, a nonprofit organization working with institutional investors, companies, and nonprofits to address sustainability issues such as climate and water risk, has launched an effort to reduce emissions and increase transparency in the food and agriculture sectors.
Called Food Emissions 50, the project intends to involve institutional investors to exercise their proxy voting rights and access to upper management to spur 50 of the largest North American publicly traded emitters to better address climate-related challenges. This includes seeking commitments from boards of directors and senior management to provide better disclosures and more transparency on their emission reduction goals and net-zero action plans in alignment with the Paris Agreement.
“High-emitting food companies have a significant role to play in achieving a net-zero emissions economy,” said Julie Nash, director of food and forests at Ceres in a recent press release. “Moving top North American food companies to disclose and reduce supply chain emissions will have considerable ripple effects in the global food and agriculture sector.”
Among the 50 names are Albertson’s, Aramark, Beyond Meat, Archer-Daniels-Midland, Campbell Soup, Chipotle, Costco Wholesale, Domino’s Pizza, General Mills, Kellogg, Kraft Heinz, Mondelez, Sysco, Tyson Foods, Walmart, and Wendy’s.
Ceres assessed the firms’ publicly available information against specific benchmarks to determine the scope of their emissions and their reduction targets.
It found that “For many food companies, Scope 3 emissions from supply chains represent around 80 percent or more of their total emissions. Despite this, few food companies are comprehensively disclosing Scope 3 emissions, including those from agriculture and land-use change. Even fewer companies have set science-based emission reduction targets that cover these emissions.”
Also, according to a 2021 study, the global food system generates about one-third of all worldwide carbon emissions.
“The majority of these emissions are embedded in the production of key agricultural commodities, which fall under scope 3, or indirect, emissions from the supply chain for food companies,” stated Ceres. “Achieving the Paris Agreement goal of limiting global temperature rise to no more than 1.5 degrees Celsius above pre-industrial levels will not be possible without rapid transformations to reduce GHG emissions from this sector.”
As a result, Ceres noted that unmeasured, undisclosed, and unaddressed Scope 3 emissions from those sectors pose major systemic risks to investor portfolios.
The Food Emissions 50 effort is seeking to accelerate the progress toward a net-zero global economy by asking investors participating in the project to pledge to take at least one of three actions: 1) Integrate the Ceres’ benchmarks on emissions disclosure and Scope 3 reductions in their investment processes; 2) Engage in dialogues and use proxy voting to improve the firms’ emissions disclosures, Scope 3 reductions, and performance; 3) Educate investors on the systemic risks coming from supply chain emissions in those sectors and the benefits of taking action.
“We are thrilled to be an investor signatory to Ceres’ Food Emissions 50,” said Leslie Samuelrich, president of Green Century Capital Management. “Deforestation and land conversion are the single largest contributors to the emissions generated by the food system, and we look forward to bringing our expertise on shareholder advocacy on deforestation to rapidly reduce agricultural sector emissions.”