Food industry focuses on sustainable sourcing to mitigate climate change

Valley farm. West Wratting, United Kingdom [Andrew Stawarz/Flickr]

This article is part of our special report Climate change and the food chain.

SPECIAL REPORT / Faced with a raw materials scarcity due to climate change, food and drink giants have turned to a sustainable management in order to protect the environment and ensure their future viability.

The global population is expected to rise from 7.3 billion today to 9.7 billion in 2050, according to UN projections.

As a consequence, according to a survey published in July by FoodDrinkEurope, this will require a 60% increase in food supplies globally, as well as a 30% rise in global demand for water for agriculture.

A report of the Intergovernmental Panel on Climate Change for 2014 has warned that the climate change will eventually affect “all aspects of the food security”, including food production and price stability.

“Global temperature increases of 4°C or more above late-20th-century levels, combined with increasing food demand, would pose large risks to food security globally and regionally,” the report warns.

The food and beverage industry is the world’s biggest purchaser of agricultural raw materials, and the impact of the climate change jeopardizes its future viability.

In the light of the industry risk due to climate change and increasing pressure on natural resources, the food and drink industry is increasingly focusing on the primary stages of the supply chain.

Sustainable sourcing

The sustainable sourcing of raw materials is considered to be a critical phase at the beginning of the economic cycle.

>>Read: The sustainable sourcing of materials is crucial to the circular economy

Many food industries have set up partnerships with farmers aiming to ensure the sustainable sourcing of their raw materials, taking at the same time full account of environmental, social and economic considerations.

According to FoodDrinkEurope’s data, 82% of its food and drink manufacturers are implementing a strategy to ensure the sustainable sourcing of their ingredients.

As part of that strategy, actions include encouraging their agricultural suppliers to undertake sustainable agricultural management practices in order to try to mitigate climate change, researching and developing more resilient raw materials, and working with smallholder farmers.

In addition, a significant part of these partnerships are the evaluation and systematic monitoring of farming practices based on environmental, social and economic criteria.

Several food giants have launched their own sustainable farming initiatives which are considered a “win-win” game for the food industry, the environment and small farmers.

Kellogg is committed to supporting to 15,000 smallholder rice growers across the world by 2020, while Pepsico is using its own programmes to help farmers in Belgium, the Netherlands, France and Germany to step up the use of organic fertilizers.

Ambitious objectives

For Unilever, a British-Dutch multinational corporation and one of the world’s leading suppliers of Food, Home and Personal Care products, the sustainable sourcing of raw materials is vital for its future, and has set ambitious goals on this purpose by 2020.

The company has set a quite ambitious target to source 100% of agricultural raw materials sustainably by 2020 (10% by 2010; 30% by 2012; 50% by 2015).

“55% of our agricultural raw materials are now from sustainable sources, up from 14% in 2010,” Freek Bracke, Corporate Communications Manager Unilever Benelux told EURACTIV.

Bracke continued, saying that approximately 800,000 smallholders had engaged with the agricultural raw materials strategy of the company.

“By working with our agricultural suppliers and other partners, we have helped around 800,000 smallholder farmers gain access to training and support,” he noted.

Unilever is highly dependent on raw materials. It is one of the biggest buyers of black tea (12% of global production volume), tomatoes for processing (3%) and palm oil (3%).

In addition, by the end of 2014, 96% of Knorr’s top 13 vegetables and herbs were sustainably grown, with carrots, peas, potatoes and tomatoes reaching 100% in the EU, the company states on its website.

Bracke noted that the company had a number of tools in place to help its suppliers and farmer’s source sustainably and it relies on its suppliers “self-assessment”.

“These include working with software developer Muddy Boots to implement our Sustainable Agriculture Code (SAC) and with Control Union to provide training. For some of our crop suppliers, we are using Greenlight, a software tool that enables our suppliers to carry out self-assessment,” he said.

In order to ensure the proper implementation of the environment-friendly standards, the company relies on the suppliers’ self-assessment.

With every crop cycle, farmers and suppliers perform a self-assessment of their operations against the requirements of the Unilever Sustainable Agriculture Code.

After that, through an independent verifier, the company checks whether these self-assessments are robust and credible.

“In addition to this process for self-assessment against our SAC, we also rely on the certification of suppliers who use sustainability standards such as those of the Rainforest Alliance, the Roundtable on Sustainable Palm Oil or the Round Table on Responsible Soy,” he added.

Certification: Not an end goal

Bracker told EURACTIV that certification is one way of helping to improve the livelihoods of smallholder farmers, and could play an important role in capacity building in agricultural supply chains.  

But this is not the ultimate goal, he noted.

“However, verification and certification are not end goals in themselves. The real challenge is to show the positive impacts that sustainability can have on the lives of farmers, their communities and the environment. We need to communicate the value of sustainable sourcing to consumers. In doing so, we will influence their buying habits towards sustainably sourced products.”

Pascal Gréverath, Head of Environmental Sustainability at Nestlé, shares this view.

In a recent interview with EURACTIV, he stressed that it was not only about getting a certificate.

“It’s about creating awareness among farmers of the potential challenges they will be confronted with and helping them address them.”

>>Read: Nestlé executive: ‘We are all facing risks of having supply challenges’

Special focus on biodiversity

Protecting biodiversity is central to its Sustainable Sourcing Programme, according to Unilever.

The Code has a specific chapter devoted to biodiversity. This encompasses both functional aspects (ecosystem services) and the protection of rare and vulnerable species and ecosystems on and around farms.

“We have found that many of our suppliers and their farmers have no experience of working directly on biodiversity or in partnership with conservation organizations. They are often unsure of how to start or how much work will be needed to make a significant impact”, the company claims and adds that the implementation of the Code by the farmers involves “a commitment to identify, and act on, local biodiversity and/or ecosystem services issues”.

A recent Eurobarometer survey showed that the vast majority of EU citizens are deeply concerned about the effects of biodiversity loss.

At least eight out of ten Europeans consider the various effects of it to be serious, while 55% of them think this is a serious issue in the local area where they live.

More than three-quarters of Europeans believe that mankind has a responsibility to look after nature and that it is important to stop biodiversity loss. More than half of EU citizens agree that biodiversity and nature are important for long-term economic development (56%).

Most Europeans might have heard the word “biodiversity” (60%) but just half of them know what it means.

The new “greener” Common Agricultural Policy focuses on the biodiversity challenge and the sustainable use of natural resources.

>>Read: Reformed CAP aims to respond to global food security challenge

>>Read: INFOGRAPHIC: How much greener is the new CAP?

Daniel Rosario, a spokesperson for Agriculture and Rural Development, recently told EURACTIV that the new Common Agricultural Policy offers a number of instruments to find adequate answers to the challenges of climate change, and to a more sustainable EU agriculture.

“Sustainable management of natural resources and climate action represent one of the three main objectives of the CAP,” he said.

>>Read: New CAP must face biodiversity challenge

“Looking across the 28 member states, a total of €25.3 billion from the EU budget for rural development has been earmarked to actions that have a positive impact on biodiversity and around 20% of all farm land in the EU will be under management contract to improve or preserve biodiversity,” he added.

“European young farmers are always ready to engage with other actors including those from the private sector in a bid to achieve a more sustainable food production system and supply chain in the EU,” Alan Jagoe, President of CEJA, an EU young farmers association, told EURACTIV.

And he added: “However considering they are already dealing with extremely tight margins and harboring the burdens of unfair trading practices from other actors in the food chain, it is essential that these environmental and sustainability costs are shared all along the food chain and not simply dumped on farmers.”

Tony Long, Director of WWF European Policy Office, said:

“Today in Europe we are consuming the equivalent of 2.8 planets worth of natural resources and yet we only have one planet. We are already in serious resource debt. We, therefore, need the EU to drive the change to a sustainable management of our planet’s resources before nature suffers further and people, businesses and the economy are impacted by increasing prices of raw materials due to resource scarcity.”

“We know farming cannot exist without biodiversity. Equally we know finding space for biodiversity within productive crop areas isn’t easy nor is it necessarily intuitive for farmers. But once our suppliers and farmers understand the concept and its worth, they love it. Our biodiversity booklet is our collection of practical proven tips for making space for biodiversity whilst still growing a crop and reaping economic benefits,” David Pendlington, Unilever Director of Sustainable Agriculture, said.

According to the European Commission, the food and drink sector contributes 23% of global resource use, 18% of greenhouse gas emissions and 31% of acidifying emissions.

An EU sustainable food chain roundtable was launched in May 2009, bringing together policymakers, farmers, food and drink producers, packaging firms and consumer organisations to develop methodologies to measure the environmental impact of the food and drinks industry.

The round table’s main achievement was the publication of a global methodology for calculating the environmental footprint of food and drink products, which was formally agreed in January 2014. On the regulatory side, the Commission followed up in 2013 by issuing a non-binding recommendation on how to measure and communicate the environmental performance of products.

A series of pilot projects were subsequently launched by the Commission in June 2014 to assess the environmental footprint of specific products like beer, coffee, meat, pasta or packed water. Those are expected to conclude in 2017 with a harmonised methodology for each product category.

The Commission will then review the pilots and decide what policy conclusions can be drawn.

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