Towards consistent measurement of Scope 3 emissions in the food and drink sector

Developing scope 3 guidance for the food and drink sector

Deloitte are delighted to have supported WRAP with a ground-breaking initiative to develop scope 3 reporting and measurement protocols for the food and drink sector that were released in the summer of 2022. The purpose of this initiative was to provide guidance to the food and drink sector to support consistent and higher quality scope 3 inventories.

WRAP is a climate action non-governmental organisation (NGO) working with corporate stakeholders in over 40 countries with the aim of taking action to achieve climate goals. Scope 3 emissions are those emissions arising from the entire value chain, the upstream supply chain and downstream activities such as the use and disposal phases, beyond the direct and energy emissions covered within scopes 1 and 2.

A vital part of the net zero journey

The 2022 UNEP Emissions Gap report highlights that the updated national pledges since COP26 are not sufficient to achieve the required 45% reduction in greenhouse gas emissions required by 2030 needed to limit climate change to 1.5°C of warming. Even at 1.5°C of warming, there will be consequences with severe weather events leading to vulnerable communities losing homes and livelihoods and disruption to species and ecosystems. Meeting the 1.5°C or less target is critical if we want to avoid these negative consequences.

The food system accounts for a third of total global greenhouse gas emissions, so developing ambitious decarbonisation plans in the food and drink sector is vital to achieve the climate change commitments made through the Paris Agreement. Many organisations express the urgency to drive down carbon emissions and are setting net zero targets for emission reductions across their entire value chain. However, measuring emissions from a company’s value chain outside of its direct operational emissions and direct energy use is challenging. Difficulties in the measurement of scope 3 emissions have made the road to net zero less certain for many organisations, especially where the majority of their emissions come from their value chain. Scope 3 emissions are particularly significant for food and drink manufacturers and retailers. They can comprise up to 95% of their total carbon emissions, as the bulk of emissions arise from the agricultural production of foods and from land use change associated with agricultural supply chains.  

Lack of consistent measurement is a challenge

A lack of consistent measurement approaches and accurate data make the calculation of scope 3 emissions difficult. Poor quality and incomplete scope 3 carbon inventories have made target setting and tracking reductions unreliable, if not impossible. Uncertainty about data quality has made engagement with suppliers to support targeted reductions difficult. The challenges around providing supply chain carbon data have also slowed progress towards a widely accepted carbon food label standard which could support consumers in making purchasing decisions based on products with lower carbon emissions.

WRAP’s scope 3 measurement and reporting protocol is aimed to plug some of these gaps. At a minimum the protocols draw together relevant existing guidance, recommendations, and requirements for scope 3 reporting. It also provides a good source of information, direction and signposting to additional support for all businesses. It includes a very clear set of recommendations for companies. In addition, the protocols provide direction on sector specific issues including definitions of what constitutes good quality carbon footprint data for food and drink products, provides clarity around what should be included in scope 3 calculations and how to include food waste prevention actions into scope 3 inventories. 

Alongside the protocol is WRAP’s emissions factor database which includes nearly 6000 secondary emission factors drawn from publicly available sources, and a supplier questionnaire to support data gathering through the supply chain. Companies can use these emissions factors for products where primary data is not available or not the preferred option for products. The database includes details of the agricultural systems for each product, for example whether crops were grown in heated or non-heated greenhouses or whether animals were reared in indoor or outdoor settings. Such factors impact the carbon footprint of the final products.

The measurement protocols developed by WRAP with Deloitte’s support, and the other resources, offer valuable support for companies of all sizes wanting to navigate this complex and time-consuming area. The intention of the protocols is also to free up more time for the sector to focus on delivering the real carbon reduction interventions needed to help solve our climate crisis. The outputs from the WRAP initiative are an important step along the path towards improved data quality that underpins true transparency and measurability as the sector transforms to a low carbon pathway.

How to find out more

The documents noted above can be found on the WRAP website. Scope 3 emissions measurement and reduction is a challenge for all companies, but WRAP’s initiative is another tool for companies looking to navigate through this difficult yet vital area. Please get in touch with us if you would like support in this area.