Food companies seeking government contracts must share a small subset of their scope 3 emissions, but some are disclosing far more than that. By David Burrows.
The Olympics, sadly, is over for another four years. But fear not – because instead of watching world records, Brits being pipped at the post in middle-distance races by the US, and debating whether those speed climbers are really being pulled up the rockface by their safety harnesses, we have a Notebook for the ages. It is fast-paced, high on (carbon) content and strong (ish) on puns.
The focus – the 100m sprint final if you will – is PPN06/21, the procurement policy note that takes account of carbon reduction plans (CRPs) in those tendering for government contracts. Most suppliers bidding for contracts worth above £5m a year must have committed to the government’s target of net-zero by 2050 and have CRPs in place. But as we have noted before, the plans include greenhouse gas emissions from scopes 1 and 2 but only a small amount of those in scope 3.
The government’s technical standard for PPN06/21 reads: “Scope 3 emissions represent up to 80% of any organisation’s carbon emissions. There are 15 categories of scope 3 emissions defined by the GHG Protocol. In completing your CRP, suppliers are required to detail their emissions for five of these categories: upstream transportation and distribution (category 4); waste generated in operations (5); business travel (6); employee commuting (7); and downstream transportation and distribution (9).”
The result? A considerable chunk of GHGs are ignored, most notably those from category 1: purchased goods and services. In an interview with Footprint in March 2022, Sodexo chairman Sean Haley revealed that its CRP accounted for just 7% of its total emissions. Raising wider awareness of this shortcoming is tricky: you try writing a powerful headline that includes the words ‘procurement note’.
Imagine our surprise, then, when we came across Compass’s CRP showing all scope 3 emissions. A spokeswoman explains: “In February we disclosed full scope 3 emissions in our CRP and supplied links to all supporting disclosures, which include further detail and the methodology. We have also revisited the technical standard for completion of carbon reduction plans and updated our CRP to include the subset categories,” she adds.
So, as well as detailing the government-required subset of scope 3 emissions – totalling 19,127tCO2e in FY2023 – the document includes a full scope 3 emissions total of 1,073,761tCO2e. In other words, 100% of scope 3 emissions rather than just 2% of them. “Greater transparency is needed to enable better, decision-useful reporting across the global industry,” says the catering firm’s director for delivery of net-zero (UK&I), Carolyn Ball. “This means making information accessible and being clear about agency, materiality, and the richness and detail of our underlying data. Our transition plan and carbon reduction plan evidence these priorities, and will continue to guide our work,” she adds.
44% v 8.5%
Looking at the data for Compass it’s easy to see why others might think twice before being as candid. If Compass only provided information on that subset of scope 3 emissions it could boast of a 44% reduction in emissions (of 15,190tCO2e, from 33,417tCo2e in the baseline year, FY2019, to 19,127tCO2e in FY2023). However, its total scope 3 emissions reduction in the same period would be 8.5%. It doesn’t look as impressive, does it? But the fact is the company has managed to cut scope 3 emissions by 99,937tCO2e, which is not to be sniffed at, and far more impressive than the 15,190tCO2e in that subset of scope 3 emissions required by the government.
Compass has a subtle pop at the current requirements. “For transparency, and to provide context/materiality, we have also split these [scope 3 subsets] out and shown them as percentages of our overall footprint,” the spokeswoman says. Waste generated in operations (category 5) for example accounts for a meagre 0.2% of the company’s total footprint (1,077,302tCO2e in FY2023), while employee commuting totals just 1.3%.
Our interest piqued, we asked Sodexo about this too. “[We] similarly took the decision to include all scope 3 GHG emissions within our PPN06/21 carbon reduction plan back in December 2023 and disclosed in a table which GHG emission categories are included for transparency,” a spokeswoman explains. Like the Compass PPN, it is detailed and highlights the shortcomings of the required data: a table shows the 15 scope 3 categories in two columns – one titled ‘included in Sodexo’s footprint’, and the other ‘required as part of PPN06/21’.
The scope 3 subset for Sodexo in 2023 amounted to 63,235tCO2e, against a 2017 baseline of 83,196tCO2e; a reduction of 24%. Include all relevant scope 3 categories and the figure rises to 588,558tCO2e in 2023, which is a reduction of 36% on the 921,725tCO2e in 2017. All the more reason, perhaps, for Sodexo to be the first-mover (from what we can see) regarding full disclosure of scope 3 emissions in its PPN06/21 report.
Simon Mussett, net-zero lead UK&I, explains: “We also included links to key documents publicly available on our website, such as our GHG emissions report that breaks the data down more granularly. The reporting period for Sodexo runs June – May; we are currently in the data capture phase for our FY2024 performance [and] our CRP will be updated by the end of the year to reflect this data once verified by our auditors,” he adds.
Will others follow this lead?
Sodexo was also the first foodservice business – and one of the first organisations globally – to have both near and long-term science-based targets validated by the Science-Based Targets initiative (SBTi). Which brings us to news that SBTi has published an update relating to scope 3 target setting and the use of carbon credits. June’s Notebook has the back story to this, but basically the SBTi looked set to endorse carbon offsets as a means to address companies’ greenhouse gas emissions, prompting a staff revolt, an embarrassing U-turn and the resignation of its CEO.
“The SBTi has stated that direct decarbonisation efforts remain the priority for corporate climate action,” note Samantha Brady and Helena Cameron in their neat summary for law firm Slaughter and May. “The existing [net-zero] standard explains that carbon credits do not count as reductions toward meeting near-term or long-term science-based targets, including for scope 3 emissions, and that carbon credits may only be considered as an option for neutralising residual emissions or to finance additional climate mitigation.”
Carbon discredited
The series of new documents released by SBTi, part of its process of revising its corporate net-zero standard, updated everyone on its thinking on offsets. Basically, more research is needed on the effectiveness of this approach. As Brady and Cameron continue: “The (albeit limited) evidence submitted to the SBTi suggests that there could be risks to corporate use of carbon credits for the purpose of offsetting emissions, which include issues such as carbon leakage and double counting or over counting of credits, with potential negative impacts including hindering the net-zero transformation and/or reducing climate finance. However, the SBTi is clear that it must assess a wider body of evidence in order to reach a conclusion.”
More on that (probably) next time. For now, we want to flag more good news relating to transparent reporting of carbon data. In recent weeks, the likes of WSH, Whitbread and Sodexo have all revealed falling GHG emissions, and they have all admitted that it’s not purely down to their own interventions.
Whitbread’s FY22/23 report noted that “the driving factor” in its 13.8% reduction in absolute scope 3 emissions was “an improvement in data granularity leading to a more accurate representation of our actual scope 3 emissions”. The reduction of 16.1% in emissions from purchased goods and services (products) was also largely down to modification of methodology, for example. “Our 2022/23 assessment contained a more granular dataset meaning that less assumptions had to be made throughout the calculations. Information such as: packaging weight, packaging type, mode of transportation and distance travelled all allowed a more accurate representation of our Scope 3 emissions to be calculated.”
Companies can’t rely on data improvements all the way to 2030 by which time 50% reductions in emissions are required, for example; so now the real value in the data will be tested as companies use what they know to pull the levers they need. Picking through the weeds of regenerative approaches, for example, or shifting their portfolios towards plant-based options.
Dairy divisions
On that front we turn finally to the concept of blended products, which we quite like but which haven’t really gained much traction yet. Mintel reckons there is appetite among flexitarians to try these products but innovation is thin on the ground. Mintel experts recently encouraged dairy brands to look into blends too, which hold “considerable appeal” to flexi-dairy-anists. Nice pun. Really nice.
Kerry Dairy is one of the few suppliers having a go at this, recently launching blended milk, cheese and butter. The carbon footprint of the blended oat and dairy cheddar is 45% lower than British mature cheddar cheese; the blended butter has a similarly lower footprint compared to its all-dairy cousin. The oat and dairy milk has 18% fewer emissions than semi-skimmed British milk. The life cycle assessments have all been published too. Now that’s what we call transparency.
