Report Says Food Industry Can Help Cut At Least 10% Of Global Emissions

Rhea-AI Summary

S&P Global Ratings released a report revealing that the food system contributes to one-third of global greenhouse gas emissions, with food loss accounting for up to 10%. The report advocates for increased collaboration in the agribusiness sector to enhance food production efficiency and reduce waste. Notably, 14% of food is lost before retail. Multinational food companies could lead in improving sustainability by investing in advanced technologies. By 2030, significant reductions in food waste are expected as firms align with U.N. Sustainable Goal 12.3.

Positive

• Companies adopting advanced food technologies are likely to gain a competitive edge.
• Agribusiness collaboration can lead to improved food production and supply chain efficiency.
• The emphasis on reducing food waste aligns with sustainability goals, potentially enhancing corporate social responsibility.

Negative

• The challenge remains for companies to visibly impact food-related emissions by 2030.
• Despite potential benefits, there is uncertainty surrounding the effectiveness of strategies proposed.

LONDON, Nov. 17, 2021 /PRNewswire/ -- Studies suggest that the food system is responsible for about one-third of global greenhouse gas (GHG) emissions, including up to 10% from lost or wasted food. In a report published today, "A Food Industry Reset Can Cut At Least 10% Of Global Emissions," S&P Global Ratings says it believes agribusinesses can strengthen the food production and supply chain through closer collaboration at every stage, both downstream and upstream. More efficient food systems will help eliminate food loss and waste while reducing the impact on the environment, especially since about 14% of the world's food is lost before reaching supermarket shelves. Food supply disruptions, especially over the past two years due to the pandemic and extreme weather, have brought this issue further into the spotlight.

There are meaningful gains to be had, for example by companies expanding into advanced food ingredient technologies to improve product shelf life, or by integrating transport with processing and sales.

"Some companies are already rethinking their long-term strategies, putting greater emphasis on managing environmental and social risks," said S&P Global Ratings credit analyst Anna Overton. "We believe they stand to achieve a competitive advantage using this approach. The big question is whether they can do enough to have a visible impact on food-related emissions by 2030, the target of the U.N.'s Sustainable Goal 12.3 of halving per capita food waste."

Eliminating food waste is essential for lowering GHG emissions and fostering food security. What's more, with 80% of global primary food production coming from small farms, the U.N.'s road map for food security sees strengthening the food system's climate resilience as an imperative.

Multinational food companies are in a good position to make efficient crop collection and processing more accessible to farmers. Global food commodity traders and processors have already emerged as leaders in upstream food system consolidation, improving their prospects for sustainable growth. This has the added advantage of widening the network for others to join. But there's still a way to go. At the consumer-facing end of the food system, scaling up investments in ingredient technologies should usher in a more diverse range of agricultural inputs, with lower waste and higher nutritional value.

"We believe food companies will likely measure their financial success in the future by benefits from the approaches they are backing today," Ms Overton added.

This report does not constitute a rating action.

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FAQ

What does the S&P report say about global emissions and food waste?

The S&P report states that the food system accounts for one-third of global GHG emissions, with food loss contributing up to 10%.

How can agribusiness improve food production according to S&P?

S&P suggests that agribusinesses can improve food production through enhanced collaboration and investments in advanced food technologies.

What is the target date for reducing food waste as per U.N. Sustainable Goal 12.3?

The target date for reducing food waste, as outlined by U.N. Sustainable Goal 12.3, is 2030.

What are the implications of the S&P report for food companies under SPGI?

The report implies that food companies must innovate and collaborate to reduce waste and improve sustainability, affecting their competitive positioning.