To reduce emissions in your supply chain (Scope 3), you can

• Set a goal based on your data
• Promote Regenerative Agriculture in the food sector.
• Enhance farmer involvement to effectively achieve your goals.

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Set a goal based on your data

After navigating the tangled and complex web of emissions in the supply chain, it's time to bring clarity once more and set clear goals. The Science-Based Targets initiative (SBTi) provides helpful guidelines and supports companies in developing emission reduction targets — simply put, the SBTi outlines how much and how quickly emissions must be reduced within your company. Based on the SBTi, you should consider the following factors when setting Scope 3 reduction targets: limits, timeframe, level of ambition, and strategies for involving suppliers. Your level of ambition is measured against the company's quantitative emissions reduction goals. Since engaging suppliers and customers can be a key lever in achieving targets within specific Scope 3 sectors, this should also be taken into account (see figure).

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Limit: Your goals must cover at least two-thirds of all Scope 3 emissions. A comprehensive greenhouse gas inventory helps you set accurate limits and prevents overestimating or underestimating them.

Timeframe: Your goals should be measurable to allow for periodic review. It may be helpful to break down the path to reducing greenhouse gas emissions into stages. For example, the SBTi requires targets to span a minimum of five years and a maximum of fifteen. Food and beverage manufacturer Danone, for instance, committed in November 2015 to reducing its overall emissions intensity across Scopes 1, 2, and 3 by 50% between 2015 and 2030, including all Scope 3 emissions.

Let’s take an ambitious example and assume your food company aims to meet the global 1.5°C climate target with its emissions reductions and achieve net-zero emissions by 2040 (ambition level, timeframe). Approximately 80% of emissions in the food sector are embedded in the value chain. While you could focus on reducing transportation and distribution emissions, the greenhouse gas inventory reveals that most emissions stem from agricultural production in the upstream supply chain. This is largely due to current agricultural practices, which, through soil erosion and other factors such as land-use changes, account for about a third of global emissions.

It is therefore most promising for a food company to focus on identifying low-emission solutions in upstream areas, and even more effective to improve the cultivation of its raw materials. Although reducing transport or process emissions is also a goal, you can also prioritise emissions reductions on farms (limiting focus areas). In this context, it makes sense to pay particular attention to engaging farmers while also considering customer involvement (supplier and customer engagement).

The following questions should therefore be considered:

How can I reduce emissions in my agricultural supply chain? And how can I strengthen the commitment of suppliers, particularly farmers, in order to achieve emission targets?

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Reduce emissions in the food sector through Regenerative Agriculture

An important approach to reducing emissions along your supply chain is to switch to modern regenerative farming practices. Large food companies such as General Mills, Unilever, and Danone have recognised Regenerative Agriculture as a new core strategy, as they see the great potential of these approaches.

Regenerative Agriculture describes methods in which humus, the top layer of soil, is built up to increase CO2 storage capacity in soil and improve water storage capacity and soil fertility. Methods such as growing diverse crop rotations, maintaining year-round soil cover, and reducing tillage while using fewer chemical pesticides and fertilisers are employed. This approach creates habitats for various species and increases biodiversity. Since it can be implemented in both conventional and organic farms, it is versatile within the supply chain of food companies.

It can be useful, in particular, to target those companies that are the biggest contributors to your organisation's Scope 3 emissions, regardless of their position in the supply chain. Klim accompanies all steps of the transition process — from selecting the farm to establishing contact with farmers and promoting Regenerative Agriculture to launching, onboarding and monitoring.

During the process, it is important to collect high-quality data that provides you with accurate information about CO2 sequestration. Assume that you have a large company with complex supply chains and many small farmers: To get an overview of emissions, it makes sense to use a recording tool. For this purpose, Klim has developed a platform that can be used easily and transparently by farmers. Farmers can document their progress in introducing regenerative practices, and Klim is examining their carbon storage. Through this process, your food company has an overview of the positive effects in the supply chain.

With the benefits of Regenerative Agriculture, you can reduce your greenhouse gas emissions as a company. And more importantly, agriculture is becoming a climate solution. In addition, farmers can not only achieve added value through healthier and more fertile soils, but also receive a significant financial benefit: Through the Klim Platform, farmers are paid for their climate measures.

That brings us to the next point: For a fair transition of your supply chain, you should always keep an eye on the needs and profitability of your most important suppliers, the farmers.

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Strengthen suppliers' commitment during the process

It is important to take this message with you and work with farmers to manage the transition. There are various approaches to working with your suppliers: You can promote Regenerative Agriculture on a voluntary basis, set company standards, or choose scoring systems. In any case, it is important to consider the conditions of your farmers.

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With financial support, technical advice, and workshops, you can engage your suppliers. To effectively support your farmers, you should focus on solutions that are tailored to their specific regions and crops. It is misleading to assume a “one-size-fits-all” approach. To avoid this, it is essential to provide specialists and advisors who fully understand the required changes and can assist your farmers in their respective areas. Furthermore, selecting farms from different regions can be a valuable step in accounting for the varying soil, climate, and cultural conditions, ensuring smooth scaling. Therefore, it makes sense to offer farmers a platform for potential knowledge exchange.

An online platform or tool such as the Klim Platform helps you to exchange opinions and ideas about best practices between farmers. The Klim Platform also helps to promote community building among farmers and exchange between the agricultural sector and your food company. In addition, experts from the agricultural and business environment are available to answer any questions or suggestions you or your farmers may have.

In addition, open events can be utilised during your transition to expand the group of farmers and invite other stakeholders, such as customers, suppliers, and investors. This can help strengthen relationships between stakeholders, such as farmers and customers, while providing external insights into the transition to Regenerative Agriculture. Webinars, videos, and non-interactive content, such as regular newsletters for farmers, can be employed to reach them remotely and share best practices and new insights.

Finally, it is crucial that you monitor your transition by recording your goals and milestones in an annual report, either privately or publicly, or better, both. You will receive an impact report from Klim, which you can share with your internal and external stakeholders. This not only gives you clarity about your goals, obstacles, and past successes, but also creates trust and transparency with your stakeholders.

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Find your own strategic approach

Would you like this example to go beyond theory and transform your company's supply chain with Regenerative Agriculture?

At Klim, we are happy to develop the right strategic approach to achieve your company's reduction goals. Together, we define the scope of the supply chain transformation. To do this, we determine the number of farmers who participate in the project and store the corresponding amount of emissions in the soil. In doing so, we take into account the individual timetable and goals of your climate strategy.

In four steps, we help you achieve a regenerative supply chain; (1) We define your project and goal, (2) we integrate your farmers into our platform, (3) we implement the project together and (4) we monitor CO2 sequestration and emissions reduction.

Together, we will achieve your net-zero goals and make Regenerative Agriculture a climate solution!

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