Role of Companies in Driving Food System Transformation

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, 9 minute read

Quick summary: Food and agriculture are not only the biggest contributors to climate change and biodiversity losses but also are under pressure to increase production. Climate change is real and a threat to society. Companies need to alter their business models to be relevant in a low carbon future and seize the opportunities that come in way. Supply chain decarbonization will be a game changer for corporate climate action.

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In the face of pressing global challenges like climate change and food security, companies play an important role in driving food systems transformation. Food systems transformation is a change in how food is produced, processed, distributed and consumed to ensure sustainability, equity and resilience.  

Our Food systems feed 7.9 billion people, employ 40% of global population and generate a third of the global GDP.   

Food and agriculture are not only the biggest contributors to climate change and biodiversity losses but also are under pressure to increase production. With the climate change being a major threat to our planet, feeding millions more sustainably has become imperative. Sustainable food production, Consumption of nutritious food and Policy decisions are few of the changes that need to happen. 

In this era of heightened environmental awareness, businesses have a unique opportunity to lead the change in reshaping our food systems. This blog explores the key role companies can play in advancing food system transformation to address the pressing global issues. 

Global Shocks of Food Systems  

Food, Agriculture, land and Oceans form the sustenance of life. Agriculture is responsible for a third of the global greenhouse emissions, over 70% of freshwater use and 80% of tropical deforestation and habitat loss. The true cost of food comers up to nearly $20 trillion that includes environment, health and economic costs.  

The pandemic disruptions, Ukraine conflicts, rising food prices, energy prices, extremities in weather due to climate change, market uncertainties, varying consumption behaviours are fuelling an urgency to strengthen the resiliency in food systems.  

345 million in 82 countries face food insecurity  

800 million people which is 10% of world population go to bed hungry.

Consumers  

87% willing to pay more for environmentally friendly products. 

Sustainability price tag high and not sure of the product’s sustainability  

Farmers  

Want to experience the long-term effects of regenerative agriculture  

Costs money and involves significant change  

Markets  

Food systems optimized, scalable and efficient  

Fragmented, Lack of transparency and sustainability  

Accelerating changes in Food systems  

  • Shift in Consumption Behaviours  

Companies need to help consumers switch to sustainable diets which are healthier for them and the planet. The benefits need to be made aware of setting reasonable price premiums.  

According to Bain, brands that are sustainable grow 2X faster.  

Plant based alternatives are driving the reduction of waste, plastics and carbon emissions ensuring a sustainable future. The meat sector is getting disrupted with alternate and tasty options.  

  • Regenerative practices for the Farmer  

Farmers producing food sustainably should be rewarded to accelerate their adoption to these practices. Carbon sequestration, reducing methane from livestock, regenerative agriculture, no-till technologies and protection of biodiversity are few of the practices that needs to be adopted. This would result in higher yields with reduction in food waste and costs and at the same type ensures food safety.  

  • Redesigning the Value chain  

The existing value chains are vulnerable to environmental changes, labour abuses, food insecurity and there is a need for transformation. The value chains need to be transparent, more collaborative and shorter. Ethical sourcing with adoption of sustainable practices can scale up efficiency in food systems.  

  • Building resilient food systems  

Public-private partnerships with collaboration among entities is necessary to implement food security solutions. The stakeholders in the ecosystem need to be engaged on a common platform to ensure sustainable and healthy food systems . 

Climate change is expected to hamper global trade. Adopting sustainable and climate resilient practices should help in mitigating climate changes and addressing the needs of poverty.  

There is a need for committed leadership, collective action to support these global priorities and build new business models in transforming agriculture systems to lead the race to net-zero. This will help the world in safeguarding nature and biodiversity, improve food security and build inclusive economies for a sustainable future.  

How can Companies work towards this climate change?  

Climate change is real and a threat to society. Extremities in weather with heatwaves, floods, drought are causing devastation leading to loss of humanitarian and economic costs.  

World’s largest 500 companies could face $1 trillion of financial risks due to climate impacts.  

The targets of Paris agreement is off track! Businesses need to understand how their operations and supply chains are vulnerable to the risks of climate change. They need to alter their business models to be relevant in a low carbon future and seize the opportunities that come in way.  

45 countries including the UK have pledged to protect nature and transit to sustainable farming. They have promised to combine more than $4 billion in public sector investments to make agriculture more resilient to climate changes. UK has pledged to use £3 billion in Climate Finance for nature and biodiversity and protecting 5 million hectares of rainforest from deforestation. Countries including US, Germany, Japan, India, Vietnam, Ethiopia, Indonesia and Ghana have also signed the pledge.   

Since 25% of total GHG emissions come from agriculture and land use, this sector is a key to resolve climate crisis and limit the global warming to 1.5˚C above pre-industrial levels. According to the pledge, the investments would be used to grow climate resilient crops and build new techniques for soil regeneration. 

The following activities can be included in their Agenda: 

  • Encourage sustainable practices which are economically viable for farmers.  
  • Enable participation in farmer organizations.  
  • Growing of climate resilient crops. 
  • Reduction of post-harvest losses  
  • Address water scarcity issues  
  • Improve quality and quantity of animal feed.  
  • Vocational programs for youth.  
  • Investments in people and technology  

These practices can limit the greenhouse gas emissions and help to meet the commitments of the climate agendas and also ensure the wellbeing of more than 500 million smallholder farmers 

Decarbonizing the Food and Agriculture Sector  

It is not possible to reach the net-zero targets or limit the global temperatures without tackling emissions from the global food system. For many companies, the emissions in their upstream supply chains outweigh the emissions from direct operations. Pushing for decarbonization among suppliers allows companies a chance for greater impact and it could result in emission reductions across borders.  

Supply chains are the biggest sources of carbon emissions in business and are critical to combat against climate change. Scope 3 emissions are a major challenge with only 16% companies able to measure them. Addressing the supply chain sustainability is a step towards net-zero.  

Supply chain decarbonization is critical to reduce carbon emissions in agriculture, mitigate the impacts of climate change and achieve the sustainability goals.

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Active supply chain decarbonization is becoming a license for businesses to operate and stay ahead the curve. The burden to decarbonize falls on the upstream material producers who find it tough to transit to net zero. The raw materials inputs may be costly but when costs are shared with the downstream customers, the burden is lighter. There is a need for collaboration between the companies and consumers which could be vital for climate change.  

A Paris compliant world needs supply chain collaboration. Supply chain decarbonization will be a game changer for corporate climate action.  

How can Companies leverage Nature Based Solutions for Food System Transformation? 

In the face of a triple planetary crisis encompassing climate change, nature loss and pollution, nature-based solutions emerge as a potent strategy to tackle pressing societal and environmental challenges. These solutions are meticulously designed to enhance the ecosystem services offered by nature. When implemented thoughtfully, NBS can yield a multitude of advantages, ranging from bolstering agricultural production and resilience to combatting climate change, enriching natural ecosystems and biodiversity and providing crucial hydrological services. One facet of nature-based solutions involves farming practices that promote soil biodiversity through sustainable soil and nutrient management, erosion control and maintenance of ground cover. 

Across the globe, pioneering companies in the F&B sector are taking proactive steps by collaborating with suppliers and farmers to implement landscape-level initiatives harnessing the power of nature. These endeavours are geared towards fortifying the global food supply chain against future challenges, simultaneously combating climate change and promoting biodiversity. The entire F&B value chain spanning from food producers and processors to manufacturers and consumer retailers bears both an interest and a responsibility in advancing nature-based solutions. 

Unlock the potential of Nature-Based Solutions for a sustainable food system. Learn how your company can make a difference.

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Technology and Innovation will be the way forward

Technologies can help companies track their supply chain emissions. Blockchain technology has transformed food supply chains bringing in transparency, accountability and food security in the food ecosystems. TraceX ‘s blockchain traceability solutions drives sustainability and builds climate resilient systems for the future.  

Measuring emissions and establishing targets to reduce emissions is not easy especially in the food industry. There is a need to embrace new technologies, platforms and innovations that could disrupt the existing systems. Large food companies are investing in innovative solutions which requires the necessary expertise and knowledge to operate. The agriculture and food sector is also one of the hardest sectors to abate and this requires governments, companies, farming communities and consumers to collaborate with adequate support from the financial sector.  

TraceX Solutions 

Trace carbon, TraceX’s sustainability and carbon management platform empowers companies to integrate nature-based solutions into their operations seamlessly. These solutions also help in decarbonizing the food supply chain by offering tools for emissions tracking, carbon accounting, supply chain optimization, sustainable sourcing, data-driven decision making, regulatory compliance, stakeholder engagement and a framework for continuous improvement. 

Conclusion 

Innovation is transforming food systems and companies are putting together their net-zero commitments in line with the Paris agreement. That’s not all. Action should follow intent. Companies embarking on this sustainability journey should articulate their intent to the stakeholders and set a strategy amongst them to achieve the climate targets. Supply chain decarbonization presents an untapped opportunity in climate action.  

Implementing a net zero supply chain will amplify the climate impact for companies and enable reduction in emissions in hard- to- abate sectors and accelerate climate cation in countries where it is not high on the agenda.

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