Feeding Climate Change: What the Paris Agreement means for food and beverage companies

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The Paris Agreement marked a major breakthrough in support for climate action from many parts of the business community, including from key actors in the food and beverage sector. But despite significant progress, much work remains both to cut greenhouse gas emissions and to support the millions of people already hit by climate change. As one of the sectors that is at highest risk of being affected by climate change, responsible for a giant emissions footprint and reliant on millions of small-scale farmers and agricultural workers in the regions most vulnerable to climate change, the food and beverage sector should lead the next generation of post-Paris corporate climate commitments. This paper presents new data commissioned from the research consultancy CE Delft on the greenhouse gas emissions footprints and water scarcity footprints of major food commodities. The data demonstrate the vital role the food and beverage industry can and must play in turning the Paris Agreement into a springboard for the stronger climate action needed. You can use our interactive data tool to explore the greenhouse gas emissions, water scarcity footprints and production levels for 17 different food commodities.
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  OXFAM BRIEFING PAPER JUNE 2016 www.oxfam.org  A sugarcane plantation in Mato Grosso do Sul, Brazil, 2013. Photo: Tatiana Cardeal/Oxfam FEEDING CLIMATE CHANGE What the Paris Agreement means for food and beverage companies The Paris Agreement marked a major breakthrough in support for climate action from many parts of the business community, including from key actors in the food and beverage sector. But despite significant progress, much work remains both to cut greenhouse gas emissions and to support the millions of people already hit by climate change. As one of the sectors that is at highest risk of being affected by climate change, responsible for a giant emissions footprint and reliant on millions of small-scale farmers and agricultural workers in the regions most vulnerable to climate change, the food and beverage sector should lead the next generation of post-Paris corporate climate commitments. This paper presents new data commissioned from the research consultancy CE Delft on the greenhouse gas emissions footprints and water scarcity footprints of major food commodities. The data demonstrate the vital role the food and beverage industry can and must play in turning the Paris Agreement into a springboard for the stronger climate action needed.    2 INTRODUCTION The Paris Agreement marked a major breakthrough in support for climate action from many parts of the business community. Hundreds of CEOs pledged to reduce their carbon footprint – 115 companies committed to aligning their targets to keep the global temperature increase below 2°C, and 52 companies promised to strive for 100 percent renewable energy. 1  For the first time, the food and beverage industry collectively added its support. The CEOs of 14 leading companies – including Ben & Jerry's, Coca-Cola, Dannon USA, General Mills, Kellogg, Mars, Nestlé USA, PepsiCo and Unilever – signed an open letter in The Washington Post   and the Financial Times  ahead of the Paris conference, pledging to accelerate business action on climate change and urging governments to do the same by forging a robust international agreement. 2  Undoubtedly, this shift in private sector positioning helped open new political space for governments to strike a deal in Paris. But what does the resulting agreement mean for the private sector, not least the food and beverage industry, which rightly spoke out about the ‘climate challenges that face our businesses’? 3   What does the Paris Agreement on mitigation mean for food and beverage companies?  On mitigation, the collective efforts announced by companies combined with the plans submitted by governments – Intended Nationally Determined Contributions (INDCs), 80 percent of which address agricultural mitigation 4  – are unprecedented in scope and scale, covering 189 countries and 98.8 percent of global emissions. 5  But the pledges are still nowhere near enough to avoid disastrous climate change. Even with full implementation, the planet is still headed for warming of 2.7°C to 3°C and the food system will see some of the most significant shocks. Food and beverage company supply chains will be disrupted, hitting their consumers and threatening the livelihoods of millions of people in developing countries who produce their raw ingredients. Central to the Paris legacy is the strengthened temperature target in the new agreement – to keep warming ‘well below 2°C, and to pursue efforts to limit the temperature increase to 1.5°C’ 6  – but this will only remain within reach with significant additional emissions cuts over the next decade. Significant reductions will be needed from the global food system, which accounts for around 25 percent of global emissions. 7  For the food and beverage industry, this means planning for deeper emissions cuts, especially in the agricultural supply chains that are responsible for the bulk of their greenhouse gas (GHG) emissions. In 2014, Oxfam exposed the significant emissions generated by the operations and supply chains of the 10 biggest food and beverage companies (the ‘Big 10’), which equal the annual emissions of all Scandinavian countries combined. 8  Moreover, many of these emissions ‘Climate change is bad for farmers and for agriculture. Drought, flooding and hotter growing conditions threaten the world’s food supply and contribute to food insecurity… Now is the time to meaningfully address the reality of climate change ... We are ready to meet the climate challenges that face our businesses.’ Open letter from CEOs of 14 food and beverage companies ahead of the Paris climate change conference     3 can be attributed to highly potent ‘super pollutants’ like methane, which accelerate the severity of climate change in the short term .  New research presented in this paper – commissioned by Oxfam and prepared by CE Delft 9  – uncovers the sheer scale of the GHG emissions footprint of key food commodities. If the top five highest-emitting food commodities (rice, soy bean, maize, palm oil and wheat) were a country, they would be the third highest emitter on the planet – only surpassed by China and the USA. 10  In recent years, a number of food and beverage companies have made important strides in seeking to eliminate deforestation from their palm oil supply chains. One of the clear messages from this research is that the sector must redouble efforts to reduce supply chain emissions from palm oil, but also pay far greater attention to tackling the huge emissions associated with other commodities that they source.  As the data in this paper makes clear, rice, soybean, maize and wheat all have higher GHG footprints in absolute terms than palm oil. While crops like rice, maize and wheat are staples that underpin the food security of millions of people, options exist to reduce their emissions footprints while supporting the livelihoods of small-scale producers. The food and beverage sector should now play a leading role in seeing those emissions fairly but significantly reduced, including through setting science-based emission reduction targets for their full supply chains. What does the Paris deal on adaptation mean for food and beverage companies?  On adaptation, the Paris Agreement established a new long-term goal of ‘enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change,’ recognizing adaptation as ‘a global challenge faced by all’ 11  and placing it on an equal footing with the status of the agreement's provisions on mitigation. All countries have committed to developing national adaptation plans and communicating them periodically. While the agreement calls for an urgent increase in funds for adaptation it does not establish a concrete target, even though developing countries are set to face adaptation costs of at least $520bn a year by 2050. 12  Oxfam projects that the pledges of increased climate finance made by several governments ahead of and during the Paris meeting will mean dedicated adaptation finance of just $6–9bn per year delivered by developed countries to developing countries by 2020 – this leaves a perilous adaptation gap. 13  For food and beverage companies, the Paris provisions on adaptation should mean a rapid assessment of responsibilities towards enhancing the adaptive capacity, strengthening resilience and reducing vulnerability of small-scale farmers and others working in or affected by their supply chains. The sector should lead the way in defining a post-Paris agenda on corporate climate resilience. To give a sense of the responsibilities of the sector in this regard, new research presented in this paper demonstrates the major contribution of key food commodities not only to GHG emissions but also to water If the top five highest-emitting food commodities (rice, soybean, maize, palm oil and wheat) were a country, they would be the third highest emitter on the planet – only surpassed by China and the USA. Developing countries face adaptation costs of at least $520bn per year by 2050, while just $6-9bn per year will flow from developed countries for adaptation by 2020, leaving a  perilous adaptation gap.     4 scarcity in a warming world. This has significant implications for the adaptive capacity of local communities, notably in the highly water-scarce region of Asia and Oceania. While many companies have introduced targeted initiatives to support farmers or workers in parts of their supply chains to adapt to the changing climate, a much more comprehensive approach is required post-Paris. This means ensuring targeted adaptation interventions tailored to the needs of small-scale farmers and workers, especially women, throughout their global supply chains. But ultimately, the Paris long-term adaptation goal should mean companies addressing their contributions to the fundamental socio-economic drivers of vulnerability to climate change. For example, companies should ensure the right of farmers and workers to organize to press for improved conditions, provide fair and stable contracts and sourcing arrangements, and ultimately ensure workers receive a living wage and farmers are able to achieve a living income so that they can be more resilient to climate-related shocks when they occur.  Setting the post-Paris agenda for corporate climate action  The Paris Agreement is a historic milestone in the fight against climate change, and the food and beverage industry made an important contribution to it. But the fight is far from over. As one of the sectors facing the gravest climate risk and responsible for a major share of global emissions, the food sector should lead the next generation of corporate climate commitments. On mitigation, food and beverage companies must work with small-scale producers to drive down the often hidden emissions in their supply chains from commodities such as rice, soy, wheat and maize, including by setting science-based mitigation targets for their full operations and supply chains. On adaptation, they must put small-scale farmers’ and agricultural workers’ resilience to climate change at the heart of their business models, ensuring that the risks their suppliers face in a changing climate are fairly shared. The first section of this paper provides an overview of how food production and climate change are intertwined. The second section looks at what the Paris Agreement on mitigation means for food and beverage companies, including new research on the GHG footprints of specific food commodities. The third section asks the same question about climate change adaptation, presents new research on the contribution of food commodities to regional water scarcity, and explores how food and beverage companies can support small-scale farmers to strengthen their resilience to climate shocks. The final section offers a set of specific post-Paris policy recommendations to the food and beverage industry on both climate mitigation and adaptation.   As one of the sectors facing the gravest climate risk and with a clear business imperative for strong climate action, the food sector should lead the next generation of post-Paris corporate climate commitments. 
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