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.
• Increase farmer involvement to achieve your goals.

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Set a goal based on your data

After you've made your way through the jungle of knotted and branching supply chain emissions, it's time to shine a light again and set clear targets to achieve them. The Science-Based Targets Initiative (SBTi) provides helpful indicators and helps companies develop emissions targets - simply put, the SBTi shows how much and how fast emissions need to be reduced at your company. Based on the SBTi, you should consider the following when formulating emissions reduction targets for Scope 3: Boundaries, Timeframe, Ambition Level, and Targets for Supplier:in Engagement. Your ambition level will be measured against the company's quantitative emission reduction targets. As supplier and customer engagement can be a key lever to achieve the targets in the specific Scope 3 sectors, this should also be considered (see figure).

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Limitation: Your targets must cover at least two-thirds of all Scope 3 emissions. The greenhouse gas inventory will help you set limits and prevent you from over- or underestimating them.

Timeframe: Your goals should be measurable so that you can review them after a period of time. It may be useful to divide the path to reducing greenhouse gas emissions into stages. For example, the SBTI requires that targets span a minimum of five years and a maximum of fifteen years. For example, in November 2015, food and beverage manufacturer Danone committed to reducing its total emissions intensity in scopes 1, 2, and 3 by 50% between 2015 and 2030, including all scope 3 emissions.

Let's take an ambitious example and assume that your food company wants to achieve the global 1.5 °C climate target with its emission reductions and reach net zero emissions by 2040 (ambition level, timeframe). About 80% of emissions in the food industry are hidden in the value chain. While you could think about reducing transportation and distribution emissions, the GHG inventory shows that most emissions in the production process are released by agricultural production upstream in the supply chain. This is largely due to existing agricultural practices, which account for about one-third of global emissions through their soil erosion practices and other impacts such as land use change.

Therefore, it is most promising for a food company to focus on finding low-emission solutions upstream, and even more effectively, to improve the cultivation of its raw materials. Although reducing transportation or process emissions is also one of your goals, you decide to prioritize reducing emissions on farms (borderline). In this case, it makes sense to pay particular attention to farmer engagement while keeping customers in mind (supplier and customer engagement).

So the following questions should be brought into view:

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

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Reduces emissions in the food sector through regenerative agriculture

One important approach to reducing emissions along your supply chain is to switch to modern regenerative farming practices. Major food companies such as General Mills, Unilever and Danone have recognized regenerative agriculture as a new core strategy because they see the great potential of these approaches.

Regenerative agriculture describes methods in which humus, the top layer of the soil, is built up to increase the CO₂ storage capacity in the soil and improve water storage capacity and soil fertility. This involves methods such as growing diverse crop rotations, year-round ground cover, and reducing tillage while using fewer chemical pesticides and fertilizers. This creates habitat all around and increases biodiversity. Because it can be implemented on both conventional and organic farms, it is versatile in the food supply chain.

It may be useful to target in particular those farms that contribute the most to your company's Scope 3 emissions, regardless of their position in the supply chain. Klim accompanies all steps of the transition process - from farm selection, contacting farmers, and promoting regenerative agriculture to kick-off, onboarding, and monitoring.

During the process, it is important to collect high-quality data that will give you accurate information about CO₂ sequestration. Assuming 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. Klim has developed an app for this purpose that farmers can use easily and transparently. Farmers can document their progress in adopting regenerative practices, and Klim verifies their carbon storage. Through this process, your food company has an overview of the positive impacts in the supply chain.

With the benefits of regenerative agriculture, you can reduce your greenhouse gas emissions as a business. More importantly, agriculture becomes a climate solution. In addition, farmers not only gain value from healthier and more fertile soils, but also receive a great financial benefit: through the climate app, farmers are paid for their climate actions.

This brings us to the next point: for a fair transition of your supply chain, you should always keep in mind the needs and profitability of your most important suppliers, the farmers.

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Increases supplier engagement during the process

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

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You can engage your suppliers with financial support, technical advice, and workshops. To put your farmers at the center, you should support solutions that are appropriate for their specific regions and crops. It is misleading to assume a "one-size-fits-all" solution. To avoid this, it is necessary to provide specialists and supporters who understand the changes needed and can help your farmers in the specific area. Furthermore, selecting farms from different regions can be a valuable step to take into account the different soil, climate and cultural conditions and to ensure a smooth upscaling. Therefore, it is useful to provide a platform for the farmers for a possible knowledge exchange.

An online platform or tool like the Klim app helps you facilitate the exchange of opinions and ideas about best practices between farmers. The Klim tool also helps to promote community building among farmers and exchange between the agricultural sector and your food business. In addition, experts from the agricultural and business communities are available to help you or your farmers with questions or suggestions.

In addition, open events can be used for your transition to expand the group of farmers and invite other stakeholders such as customers, suppliers and investors. This can help you strengthen relationships between stakeholders such as farmers and customers and provide them with external insights into the transition to regenerative agriculture. Webinars, videos, or non-interactive content such as regular farmer newsletters can be used to reach farmers remotely and share best practices and new insights.

Finally, it is critical that you monitor your transition by recording your goals and milestones in an annual report, either privately or publicly, or better yet, both. You will receive an impact report from Klim to share with your internal and external stakeholders. This not only gives you clarity on your goals, obstacles, and successes to date, but also builds 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 targets. Together, we define the scope of the supply chain transformation. To do this, we determine the number of farmers participating in the project and store the corresponding amount of emissions in the ground. We take into account the individual timetable and the goals of your climate strategy.

In four steps we help you to achieve a regenerative supply chain: (1) we define your project and goal, (2) we involve your farmers in our platform, (3) we implement the project together and (4) we monitor the CO₂ sequestration and emission reduction.

Together, we'll reach your net-zero goals and make Regenerative Agriculture the climate solution!

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