Reducing greenhouse gas (GHG) emissions is the greatest challenge of our time. As the business world grapples with the climate crisis, the focus increasingly turns to corporate supply chains where the bulk of emissions, known as Scope 3, reside.
Scope 3 GHG emissions encompass all indirect emissions that occur in the value chain of a business, including both upstream and downstream emissions. This is often the largest source of carbon emissions for companies, particularly those in manufacturing and consumer goods, including food. They are also the emissions that are the most difficult to manage given they occur outside direct operations, involving activities such as purchased goods and services, waste disposal, and employee commuting.
But the world has no chance of reaching the goals set out in the Paris Agreement on climate change if companies ignore their Scope 3 emissions. Failure to address supply chain emissions means no firms can forget about reaching net zero.
But brands face numerous and complex challenges in managing their Scope 3 emissions, not least data collection difficulties, and a lack of standardization in reporting practices. However, overcoming these challenges is crucial as stakeholders, including consumers, investors, and regulatory bodies, increasingly demand transparency and accountability in environmental impact.
So, the onus is on every sector in every corner of the globe – from soybean farmers in the U.S. and textile spinners in Pakistan to aluminium smelters in Germany and electricity providers in Denmark – to decarbonize their operations. The only way we will be able to reduce the carbon footprint of products and services is if every industry takes an equally ambitious approach to their associated reducing GHG emissions.
Scope 3 is key challenge for brands
In food and drink, a staggering 90 percent of an average company’s footprint lies within Scope 3. This includes the manufacturing, packaging, distribution, food preparation and cooking stages of a product. It also includes what happens at the farm level, with all bought-in inputs such as manufactured fertiliser, imported feed and machinery and equipment, and the transport of supplies contributing to the overall footprint.
Reducing this footprint continues to occupy the minds of soy producers across the U.S. who are acutely aware of their role in helping industries hit their net zero milestones. In the U.S., soy is a major commodity crop, with soybean production contributing around $124 billion to the U.S. economy every year. Today, more than 350 million tons of soy is produced globally, and the U.S. is one of the commodity’s largest producers and is the second-largest exporter. Soybeans also comprise about 90% of U.S. oilseed production in the agricultural industry.
Superior performance tracking
Unlike soy sourced from other parts of the world, such as South America, U.S. Soy benefits from superior performance measurement which has become a cornerstone of sustainability in soy production across the U.S. Accurate and reliable measurement systems enable farmers and companies to track their environmental impact and make informed decisions to improve their practices.
Several frameworks and tools are used to measure and report metrics, such as GHG emissions, water usage, soil health, and biodiversity impacts. For example, the Field to Market’s Fieldprint Platform allows farmers to assess the sustainability of their operations against national and regional benchmarks. Similarly, the U.S. Soy Sustainability Assurance Protocol (SSAP) provides a standard for verifying sustainable practices in US soy production. These tools not only help in measuring performance but also in communicating the sustainability of soy to stakeholders across the supply chain.
Accurate carbon data is essential for companies to manage their carbon footprints and achieve their sustainability goals. In the U.S. soy industry, advanced methods and technologies are used to collect and verify carbon data, including satellite imaging and remote sensing, to ensure data integrity and transparency. The use of blockchain technology, to track the journey of soybeans from farm to table, means the data on carbon emissions is tamper-proof and trustworthy.
U.S. Soy impacts falling
The good news is buyers are able to better account for the overall climate impact associated with their U.S. soy inputs. A recent lifecycle assessment shows the U.S. soybean industry’s global warming potential (GWP) profile fell considerably in 2021 for whole soybeans, soybean meal, and soy oil compared to previously reported data from 2015 and 2010. The study, commissioned by the United Soybean Board (USB) and the National Oilseed Processors Association (NOPA), explored the key impact points, including soybean cultivation and harvesting, which features the use of herbicides and fertilizers in field operations, as well as transportation, and the energy used during processing. It found that, across 454 farms in 16 states, the industry’s carbon footprint decreased for all U.S. soy commodities compared to 2015, including a 19% decrease for soybeans, a 6% decrease for soybean meal, and a 22% decrease for crude soy oil.
According to the study, effective land management is improving soil health and water quality. Making more efficient use of the land and advances in seed quality has seen yields jump 24% since 2015. No-till, cover crops and shifting farming practices are helping to cut pesticide use.
Insetting is a viable solution
A common approach to dealing with Scope 3 emissions is the use of offsets – the process of buyer carbon credits to balance the carbon books. But rather than paying for credits generated elsewhere, an increasing number of companies are turning to insetting as a viable way to address supply chain emissions. This involves investing in initiatives and projects carried out by agricultural producers to keep the associated carbon benefits within the supply chain.
It is an approach being used by Farmers for Soil Health, a collaborative initiative led by the Soy Checkoff, Pork Checkoff, and National Corn Growers Association in partnership with state commodity groups and conservation organizations. By enrolling in the scheme, farmers can receive incentive payments for planting cover crops, for example, which help to retain water and nutrients in the soil. Farmers that planted cover crops in late 2023 are eligible for a three-year contract payment of $50 per acre. “It’s a unique program because it was built by farmers for farmers, and it assists with the cost and learning curve of adopting cover crops,” says Ben West, executive director of the initiative.
The Scope 3 emissions challenge is both promising and complex
As companies continue to seek sustainable solutions within their supply chains, soy presents a valuable tool for reducing indirect carbon emissions. The ongoing development of performance measurement practices, coupled with robust verification mechanisms, will be crucial in ensuring that soy can deliver on its potential as a sustainable commodity of choice.
Looking forward, the integration of soy into broader decarbonization strategies will likely evolve with advancements in technology and increased regulatory pressures. The U.S. soy sector must remain adaptive and proactive in its practices to meet the growing demands of a climate-conscious global market. This will involve not only continuing to enhance the sustainability of soy production but also expanding its applications in reducing emissions across a variety of industries.
