Poor supply chain understanding hinders supermarkets in reducing climate impact

The world’s ten largest supermarkets are making progress in reducing the climate impact of their operations. However, tackling emissions across the entire supply chain – where 90 per cent of emissions occur – requires large-scale change and greater collaboration across the sector. So reports climate consultancy Carbon Trust in a new report.

The report ‘Big changes in store: How can the global supermarket sector accelerate to net zero?’ charts the progress towards net zero of the world’s ten largest supermarket chains. These are successively Walmart (US), Schwarz Group (owners of Lidl and Kaufland, Germany), Kroger (US), Aldi Süd (Germany), Tesco (UK), Carrefour (France), Edeka (Germany), Albertsons (US), Aeon (Japan) and Ahold Delhaize (Netherlands). Carbon Trust’s Net Zero Sector Assessment Tool was used to look at seven key components of a robust net zero plan.

Four supermarkets with net zero targets

The findings show that only four of the world’s ten largest supermarket chains have net zero targets. All ten have short-term plans to reduce emissions from shops, depots and vehicles, but only four also have long-term goals to tackle product-related emissions. In fact, these account for almost 85 per cent of their footprint. Making food production climate-neutral – the sector’s largest source of emissions – is also at a very early stage.

Lack of understanding of supply chains

A lack of understanding of their supply chains hinders supermarkets in setting targets, creating action plans, reporting and implementation, especially in stopping deforestation. Only half of the top 10 supermarkets disclose data on the products they source – a major source of emissions in the supply chain and accounting for 60 per cent of their total emissions. Eight out of ten supermarket chains also have ambitious targets to stop deforestation, but challenges in transparency and traceability limit progress.

Recommendations for supermarkets

The report makes recommendations that supermarkets can implement both individually and collectively. A key suggestion includes supporting food producers to adopt climate-friendly agricultural practices. Optimising animal feed, for example, which can reduce methane emissions from livestock production. Supermarkets can also enable and encourage farmers to switch through premiums, low-interest loans, and by offering earlier payments for sustainably produced goods.

Net zero economy also offers opportunities

Supermarkets could also achieve more by working together, according to the report. For example, sharing emissions data in the supply chain, agreements to pay farmers a premium for sustainably produced goods, and pooling resources to tackle polluting commodities like meat and dairy. The transition to a net zero economy also offers commercial opportunities, according to Carbon Trust; from future-proofing business models to exploring new opportunities in low-carbon markets. Those for alternative proteins, for example.

Deep cooperation crucial

‘Supermarkets, with their important position at the centre of the global food system, have a golden opportunity to use their influence to engage suppliers, customers and policymakers on the route to a net zero future. They are under pressure today to deliver healthy, affordable and sustainable products. The good news is that there are solutions to achieve this. But deep collaboration between supermarkets and suppliers is crucial for this,’ reports Simon Retallack, director of Carbon Trust.

Emissions data platforms

Such collaboration, he says, is needed, for example, to set up and manage shared data platforms to collect emissions data and detect links to deforestation, joint investments to adopt regenerative farming practices on a larger scale, and adopting a collective voice to exert greater influence on purchasing behaviour and policy. ‘Through collaboration, including in the supply chain, supermarkets can accelerate progress, create opportunities and develop a food system that is resilient for the future.’