Food companies underestimate environmental risks

Companies operating in the global food value chain are underestimating key environmental risks and ignoring opportunities for creating a more sustainable food system, according to a new report published by CDP.

The report, Hungry for Change, analyses the environmental disclosures of 504 companies involved in the production, processing and sale of food products – including Walmart, Nestlé, Pepsi and Target. The analysis takes a comprehensive look at the entirety of the value chain of the global food system, from producers and purchasers, to processers and manufacturers, to retailers. It analyses the companies’ environmental risks, impacts and future opportunities through the lens of the interlinked issues of climate change, deforestation and water security.

The analysis finds that food companies are responding to growing consumer demand for healthy and sustainable products by producing more foods made from plant proteins (as opposed to GHG emissions-intensive beef and other animal proteins). One third of all business opportunities disclosed to CDP are related to new products & services, such as offering vegan options.

However, the report warns that companies are not sufficiently building resilience against drought and other risks. The analysis suggests that companies see more opportunity in “green” products than in true resilience-building – a potentially grave misstep in a warming world that sees more frequent extreme weather patterns each year, which in turn make it harder to grow ample and nutritious food.

One encouraging sign is the year-on-year increase in food value chain companies setting ambitious decarbonisation targets, however, the report argues that limiting global warming to 1.5C will not be possible without a rapid transformation of the global food system and all players in the value chain will be required to move away from business as usual.

“Food is a critical environmental, social and economic issue that impacts us all,” said Bridget Schrempf, manager, Sustainable Food Systems at CDP. “As the demand for food has grown, so has the resulting surge in emissions, loss of natural ecosystems and forests, increasing water scarcity and pollution and declining biodiversity. But a better future is possible. Companies have a remarkable opportunity to build a just, fair and sustainable food system that meets the needs of the world’s population without exceeding our planetary boundaries.”

The report finds that existing market mechanisms are not sufficient to support and incentivise the transformation of the global food sector into a sustainable system. Effective, concrete policy is needed.

The analysis is the first output produced by CDP’s newly launched Sustainable Food Systems Initiative, which aims to shine a light on the key role of agriculture and food sectors in the environmental crisis.

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