$205 billion per year needed from the agrifood sector to mitigate half of global food system emissions
- Investment from the agrifood sector of up to USD $205 billion per year between 2025 and 2030 could achieve up to 9 gigatons of CO2 equivalent of mitigation annually by 2030, according to new reports.
- While significant, these costs are manageable as they equate to less than 2% of total projected food sector revenues and come with associated co-benefits including potential additional returns of up to USD $190 billion per year by 2030, and savings of up to USD $30 billion per year from on-farm solutions.
- The burden of implementing these mitigation solutions does not fall equitably across value chains, with costs landing most heavily on farmers, who are the least able to pay. To deliver on sustainability commitments, companies must reassess how they partner with actors in the value chain and work with policymakers and financial institutions to alleviate some costs and risks that farmers face.
05:01 GMT/00:01 EST, 26 MARCH 2024, LONDON: The agrifood sector must play a crucial role in keeping 1.5C within reach by urgently cutting greenhouse gas emissions and scaling up nature protection solutions through their value chains, according to a series of reports launching today from the Food and Land Use Coalition, the World Business Council for Sustainable Development and We Mean Business Coalition.
The Future Fit Food and Agriculture report series argues for the adoption of ambitious sustainability action plans by agrifood companies and sector-wide investments of approximately USD $205 billion per year between 2025 and 2030 to unlock up to 9 gigatons of CO2 equivalent of mitigation annually by 2030. The first report aims to help agrifood companies understand the implications of current and emerging voluntary standards and the expected trajectory of regulation for climate and nature. The second report unpacks the financial costs and benefits of implementing mitigation solutions to tackle agriculture and land-use change emissions in company value chains.
The case for urgent action is clear: agricultural production emissions must decrease ~30% by 2030 to align with the Paris Agreement’s goal to limit global warming to 1.5°C by 2050.
The climate strategies of most food and agriculture companies, from input providers and food producers, through to traders and multinational companies, are not comprehensive or ambitious enough. According to the World Benchmarking Alliance, 165 of the 350 most influential food and agriculture companies are yet to disclose any Scope 3 commitments.
In light of these challenges, policymakers are increasingly mandating action on climate and nature from companies, using voluntary standards as the basis for new sustainability legislation.
Morgan Gillespy, Executive Director, Food and Land Use Coalition, commented: ”Food and agriculture companies are facing a choice. Those striving to deliver ambitious sustainability strategies today, in close collaboration with farmers in their supply chain, will likely enjoy lower costs, stronger returns and greater agility in the face of advancing sustainability regulation. Those that stall won’t just fail to deliver on climate and nature commitments, they will face higher costs and higher supply chain risks in the long term.”
Agricultural production and land-use change emissions in company value chains account for nearly half of total food systems emissions (an estimated 10 GtCO2e of a total 21 GtCO2e in 2030).
Analysis from the Future Fit Food and Agriculture reports series estimates that, to mitigate up to 90% of their annual agricultural and land-use change emissions by 2030, food and agriculture companies should expect sector-wide costs of approximately USD $205 billion per year (2025-2030).
While significant, such investments are manageable for the sector as a whole and have associated co-benefits:
- USD $205billion per year represents less than 2% of the sector’s projected USD $13 trillion average annual revenues for 2025-2030.
- One-fifth of the USD $205 billion per year are investments in new and growing markets. These investments, estimated to be USD $40 billion per year (average annual from 2025-2030), could lead to potential additional returns of up to US$D 190 billion per year by 2030.
- Some on-farm solutions provide savings and/or increased yields worth up to USD $30 billion per year.
- Other associated co-benefits include increased supply-chain resilience and delivery on other sustainability commitments, such as nature targets;
The burden of implementing mitigation solutions should be shared more equitably across value chains. In general, the more upstream a value chain participant is, the lower its margins tend to be — farmers in particular tend to have the lowest margins of any value chain participants. It follows that companies across the value chain must work together to determine transition economics and arrive at a transparent, fair and equitable distribution of costs and benefits. They also stand to benefit from making more unified policy asks to government on what it can do to alleviate the costs for all and enable acceleration.
The second Future Fit Food and Agriculture report shows that the costs for mitigation, as a percentage of revenues, change very significantly depending on where actors sit along the value chain. The report shares three examples to illustrate this point, including the case of a Brazilian beef farmer, for whom mitigating 30% of their agricultural production emissions could cost as much as 17% of their revenues – an unrealistic expectation given farmers typically achieve profit margins of less than 20%.
Overcoming inequity requires food and agriculture companies to reassess how they partner with other actors in the value chain, particularly farmers, and how they engage with policymakers to incentivize and accelerate action. Some companies are already leading the way on this, with several working together through the likes of WBCSD to identify where they can problem solve collectively, raise ambition levels, drive harmonsation, and accelerate the implementation of critical solutions.
Diane Holdorf, Executive Vice President, World Business Council for Sustainable Development, said: “Food system transformation is a central solution to climate change and agrifood companies have a critical role to play. To meet net-zero targets, businesses must take concerted and ambitious action to de-risk the transition for producers and ensure the costs and benefits of mitigation are shared equitably across the value chain.”
Luke Pritchard, Deputy Director, Nature Based Solutions, We Mean Business Coalition, stated:
“Transitioning to a future fit food system will require companies to mobilize equitable investments and fair partnerships with farmers. This new research highlights that the capital needed to drive that transformation is not only within reach, but will also pay dividends to early movers.”
ENDS
Additional information and interviews are available upon request. Please contact FOLU Communications:
| Sophie Mongalvy +33 6 31 75 86 95 sophie.mongalvy@wri.org |
Klara Nilsson +44 7771 750955 klara.nilsson@wri.org |
The following spokesespeople will be available to conduct interviews:
FOLU
Morgan Gillespy, Executive Director, Food and Land Use Coalition
Kitty Parker Brooks, Head of Business Engagement, Food and Land Use Coalition
Christine Delivanis, Partner and Head of the Nature Platform, Systemiq
WBCSD
Diane Holdorf, Executive Vice President, World Business Council for Sustainable Development
Kate Newbury-Hyde, Senior Manager, Agriculure and Food, World Business Council for Sustainable Development
We mean Business Coalition
Luke Pritchard, Deputy Director, Nature Based Solutions, We Mean Business Coalition
NOTES TO EDITORS
Please find the two reports here
About the Food and Land Use Coalition (FOLU)
www.foodandlandusecoalition.org
The Food and Land Use Coalition (FOLU) is a global community of innovators and experts working to advance sustainability, equity and resilience in food and land use systems. United by a shared vision of rapid and transformative change, this network of country platforms (Brazil, China, Colombia, Ethiopia, India, Indonesia, and Kenya), partners organizations and Ambassadors, strives for a world in which food and land use systems enable people and nature to prosper. Created in 2017, FOLU advances diversity, embraces disruptive thinking, and forges consensus through an evidence-based approach. The coalition empowers farmers, policymakers, businesses, investors, and civil society to unlock collective action at scale.
About the World Business Council for Sustainable Development (WBCSD)
www.wbcsd.org
The World Business Council for Sustainable Development (WBCSD) is a global community of over 225 of the world’s leading businesses driving systems transformation for a better world in which 9+ billion people can live well, within planetary boundaries, by mid-century. Together, we transform the systems we work in to limit the impact of the climate crisis, restore nature and tackle inequality. We accelerate value chain transformation across key sectors and reshape the financial system to reward sustainable leadership and action through a lower cost of capital. Through the exchange of best practices, improving performance, accessing education, forming partnerships, and shaping the policy agenda, we drive progress in businesses and sharpen the accountability of their performance.
About We Mean Business Coalition
www.wemeanbusinesscoalition.org
We Mean Business is a global nonprofit coalition working with the world’s most influential businesses to take action on climate change. We collaborate with a core group of seven business-focused climate nonprofit organizations to accelerate the transition to a just and climate resilient net zero economy. These founding partners help to deliver key initiatives and activities that are central to the success of the overall Coalition’s bold objectives. Beyond this core group, we also collaborate with a wider network of organizations that help to realize our shared vision at speed and scale.
Methodology
The estimates presented in the two Future Fit Food and Agriculture reports draw on a range of sources, the most significant of which are outlined below. The first step was to estimate emissions from global food systems. Once these had been corrected for emissions from the informal sector, the remaining emissions were attributed to the formal sector and so within food and agriculture supply chains. For these emissions, the authors of the reports estimated the mitigation potential from the adoption of a range of solutions, all from the below sources, to identify what was possible by 2030. For more detail please see the Technical Appendix.
1 Roe, S., Streck, C., Obersteiner, M., Frank, S., Griscom, B., Drouet, L., Fricko, O., Gusti, M., Harris, N.,
Hasegawa, T., Hausfather, Z., Havlík, P., House, J., Nabuurs, G.-J., Popp, A., José Sanz Sánchez, M.,
Sanderman, J., Smith, P., … Lawrence, D. (2019). Contribution of the Land Sector to a 1.5 °C World. Nature
Climate Change 9(11): 817–28. https://doi.org/10.1038/s41558-019-0591-9.
2 Roe, S., Streck, C., Beach, R., Busch, J., Chapman, M., Daioglou, V., Deppermann, A., Doelman, J., Emmet-
Booth, J., Engelmann, J., Fricko, O., Frischmann, C., Funk, J., Grassi, G., Griscom, B., Havlik. P., Hanssen,
S., Humpenöder, F., Landholm, D., … Lawrence, D. (2021). Land based measures to mitigate climate
change: potential and feasibility by country. Global Change Biology 27(23): 6025–58. https://doi.org/10.1111/
gcb.15873.
3 McKinsey & Company. (n.d.). Reducing Agriculture Emissions through Improved Farming Practices.
https://view.ceros.com/leff-communications/abatement-cost-curve-desktop.
4 Bengston, O., Feng, S., Ganesan, V., Katz, J., Kitchel, H., Mannion, P., Prabhala, P., Richter, A., Roen, W., &
Vleck, J. (2023). The Agricultural Transition: Building a Sustainable Future. McKinsey & Company, New York,
USA. https://www.mckinsey.com/industries/agriculture/our-insights/the-agricultural-transition-building-
a-sustainable-future#/.
5 FAO. (n.d.). FAOSTAT. Emissions totals. Webpage. https://www.fao.org/faostat/en/#data/GT.
Supporting quotes for the Future Fit series of reports are as follows:
Eva Zabey, CEO, Business for Nature Coalition, said: “By developing a credible corporate nature strategy, approved at the most senior level, a business is more likely to deliver concrete actions to halt and reverse biodiversity loss by 2030, and meet increasingly stringent regulatory reporting requirements on nature.”
Carla Hommes, Food Transformation Research Lead, World Benchmarking Alliance, said: “Companies must urgently act across the food and agricultural value chain to achieve net zero by 2050. Small-scale producers are crucial in this process, thus supporting and engaging with them is essential for effective mitigation and resilient supply chains.”
Martha Stevenson, Senior Director, Forests Research and Strategy, World Wildlife Fund, said: “The food sector will incur some of the biggest impacts of climate change. Simultaneous climate mitigation and adaptation will be essential to address these. For this transition to be just, shared responsibility and shared risk approaches must be deployed across the supply chain while respecting and supporting farmers’ and smallholders’ land and carbon rights as they adopt new practices.”
Bambi Semroc, Senior Vice President of the Center for Sustainable Lands and Waters at Conservation International, said: “Transitioning to regenerative agricultural systems is essential for meeting our global climate and biodiversity targets. To enable this, we must incentivize the transition to agricultural systems that are both climate-smart and support prosperity for rural communities. These reports demonstrate the need for companies across the food and agricultural sector to increase their engagement and investment in this global transition. Establishing science-based nature and biodiversity targets is an essential step in meeting these needs.”
