Plant-rich Food System Can Offer Climate, Health Benefits
Investing in reformed consumption and production could be five times more profitable than in renewables, but Scope 3 reporting remains a struggle.
Investing in a plant-rich food system could add several “healthy years” to the human lifespan and help realise annual savings of US$3.2 trillion by 2050, new research has shown.
Published by freshly launched global philanthropic initiative Tilt Collective and collaborative system developer Systemiq to coincide with New York Climate Week, the report argued that investing to transform the food system would also bring a “spectacular pay-off” for the climate – with emissions reductions estimated at 28 metric tons of carbon dioxide equivalent per US$1 billion (MTCO2e/$bn) invested.
According to the report, this is over five times more than renewables (5 MtCO2e/$bn), and four times more than electric vehicles (EVs) (7 MTCO2e/$bn) when considering annual return on investment in relation to emissions reduction.
“The food transition, relative to some others, is still in very early stages. Not enough money has gone in to move things forward, and the mitigation potential is significant,” Christine Delivanis, Head of Systemiq’s Nature and Food Programme, told ESG Investor. “As such, returns on investment from a climate, nature and health perspective are very high.”
Emissions savings from plant-rich consumption and production would also far outpace those made from implementing sustainable farming techniques, the report claimed – yielding 2.5 times the average emissions reductions per billion invested compared to improvements in livestock and crop production, such as methane inhibitors or regenerative agriculture.
“The outsized climate benefits are clear, and the data is undeniable that investing in plant-rich food systems offers exponentially more emissions reductions for the money spent,” said Tilt CEO Sarah Lake. “But investment to date is miniscule, with only 2% of total funding needs met. Greater investment stands to catalyse enormous rewards.”
The global food system is a major contributor to greenhouse gas (GHG) emissions, with recent estimates having placed these at 15.8 gigatonnes (GT) of CO2e per year – representing 30% of the world’s total GHG emissions, equivalent to the combined emissions of China, India and Canada. According to the UN, food systems are also responsible for 80% of deforestation and are the single largest cause of biodiversity loss on land.
“A key driver of deforestation is the expansion and farming of agricultural commodities,” said Delivanis. “These sorts of dynamics and the ever-expanding footprint of agriculture as it’s currently practised lead to material amounts of nature loss.”
Current production and consumption patterns also result in negative health outcomes, the report noted, with a projected cost of US$8.6 trillion per year by 2050 – caused by rises in non-communicable diseases and elevated antimicrobial resistance, as well as pandemic risks stemming from livestock production.
Tilt and Systemiq argued that a plant-rich food system would help realise US$3.4 trillion in annual health savings by 2050, and result in land sparing – i.e., released from agricultural use – that would reduce biodiversity loss by 40% and remove 2-4 GT of carbon annually by 2050.
“Advancing a plant-rich food system remains ominously absent from the conversation,” said Lake. “To unlock this transition, we need early-stage investments by philanthropies that can catalyse funding and interest from other financial sources.”
The analysis quantified the investment needed at US$160 billion incrementally per year to align with a 1.5 °C future. It said an initial investment of US$250-500 million from philanthropy could unlock US$4-7 billion of public and private finance, triggering a multiplier effect.
“Moving to a plant-rich food system is a win-win for climate, nature and people, yet the scale of philanthropic investment is actually quite small,” said Andy Jarvis, Director of Future of Food at the Bezos Earth Fund. “We see this as a high leverage opportunity for philanthropy to catalyse action by governments, the private sector and civil society to meet net zero goals and boost human health and nutrition.”
Tilt and Systemiq identified three main levers to deliver the food system transition: shifting to plant-rich consumption and production; improving livestock and crop production practices on farm; and reducing food loss and waste.
“Much of the attention and investment is going to on-farm improvements in livestock sustainability or intensification,” said Robin Willoughby, Chief Strategy Officer at Tilt. “This research shows that we really need to have a lot another look at how advancing a plant-rich food system can have multiple positive impacts.”
Scope 3 is key
In a separate report, sustainability-focused US investor network Ceres further backed up the idea of a moderate progress towards a low-carbon food system, as measured by corporate disclosures assessed in its Food Emissions 50 benchmark.
Launched in 2021, Food Emissions 50 aims to accelerate progress towards net zero in the food sector, engaging 50 of the highest-emitting companies in North America to improve climate disclosures, set ambitious targets, and develop transition plans. It is currently supported by 35 investors, including Allianz Global Investors, PGGM, Trillium Asset Management, Ninety One and the New York State Common Retirement Fund.
Ceres found that although companies have made overall progress towards reducing direct emissions, their slower progression towards addressing supply-chain emissions (also known as Scope 3) is impeding them from achieving the total reductions needed to transition to a low-carbon economy.
“These findings emphasise the real need for the food sector to reduce Scope 3 emissions, as it’s really holding the sector back from addressing total emissions,” Nako Kobayashi, Food Emissions 50 manager at Ceres, told ESG Investor. “These assessments are getting easier to do over time as more companies disclose their emissions, but there is still room for improvement.”
Around 60% of companies have made progress on Scope 1 and 2 emissions, while 38 Food Emission 50 companies are now reporting Scope 3 emissions, compared to just 20 upon launch. Ceres described supply-chain emissions as a “critical area” where the sector needs to take more ambitious and urgent action.
“No company reported decreases in overall emissions without its Scope 3 emissions also dropping,” the report noted, highlighting a critical link between the two. Even large reductions by companies in Scope 1 and 2 emissions did not compensate for rising Scope 3.
“Very few organisations are holding companies accountable in terms of progress on their targets,” Meryl Richards, Programme Director for Food and Forests at Ceres, told ESG Investor. “Continued investor engagement is going to be very important, because disclosure of Scope 3 emissions will likely – for the time being, in the US at least – continue to be based on voluntary disclosure.”
Although the US Securities and Exchange Commission dropped Scope 3 disclosure requirements from its climate disclosure rules earlier this year, the California climate bills and Europe’s Corporate Sustainability Due Diligence Directive have mandated those.
“From an investment risk perspective, these emissions are mainly from on-farm activities and land-use change, which is about 25% of global GHG emissions,” said Richards. “It’s a huge contributor to overall climate risk. To get at this, it’s really key for investors to engage with food companies on their supply-chain emissions.”
According to Richards, investor engagement has already begun to “bear fruit” – including through shareholder resolutions withdrawn in exchange for an agreement with the companies, or through dialogues that pushed progress.
“Since emissions reductions efforts may take time to bring results in this sector, it’s even more important for companies to publish [their] plans, so that investors know they are poised to mitigate risks and seize opportunities in the transition to a lower-emissions economy,” she added.
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