What's Happening?
Agriculture is a significant contributor to global greenhouse gas emissions, with agribusinesses playing a crucial role in this dynamic. Despite commitments from large agribusinesses to reduce emissions, smallholder
farms, which produce lower emissions per hectare, face challenges in transitioning to low-emission practices due to lack of support. The report highlights the importance of Scope 3 emissions, which are indirect emissions from the entire value chain, including agricultural production and supply chain operations. These emissions are often overlooked but constitute the majority of the climate impact of agribusinesses. The Science Based Targets initiative has developed guidance to help agribusinesses set ambitious Scope 3 targets, yet progress has been slow, with less than 12% of top agribusiness companies validating their Scope 3 targets.
Why It's Important?
Addressing Scope 3 emissions is critical for agribusinesses to achieve credible climate action and align with global climate objectives. These emissions represent the largest share of the climate footprint for agribusinesses, and failing to address them undermines the credibility of corporate climate commitments. By focusing on Scope 3 emissions, agribusinesses can improve climate resilience, unlock climate finance, and enhance market differentiation through practices like carbon insetting. This approach not only benefits the environment but also supports smallholder farmers, who are integral to the supply chain, by providing them with technical assistance and access to carbon markets.
What's Next?
Agribusinesses are encouraged to participate in regular tracking and disclosure of their Scope 3 commitments, policies, and performance. This involves creating indexation based on factors like value chain boundary identification, governance accountability, and supplier engagement. Companies must ensure that Scope 3 strategies deliver direct value to smallholder farmers, incentivizing them to transition to low-emission farming through fair pricing and procurement security. Additionally, investments in training on climate-smart practices and access to digital tools are essential to improve productivity while reducing emissions.
Beyond the Headlines
The focus on regenerative agriculture, while beneficial, often overshadows the need for explicit Scope 3 emission reductions. Companies may improve methods on the ground, but without addressing major drivers of emissions like deforestation and methane emissions, the overall impact remains adverse. Regenerative agriculture must be linked to verifiable emission reductions to achieve systemic decarbonization in global food systems. This requires a shift in business models to prioritize environmental performance alongside commercial success.
