What we choose to eat and how that food is made affects the planet and our health. Food items have to be processed and grown, transported, distributed, prepared, consumed, and oftentimes, disposed of. According to Forbes, over a third – 34 percent – of all human-made greenhouse gas emissions are created by food systems. All of these steps accelerate climate change and are known as the food value chain. There is no way to avoid this chain of events but how do we make the process more planet-friendly? SMEs have proven to be key drivers of green growth with their innovative mindsets and immense drive.
They can contribute to emission reduction along the food value chain so we can get closer to decarbonising the industry. Continue reading as we dive further into the food value chain, why it is our latest big challenge, and how SMEs can help.
About the food value chain and why it is our next big challenge
If you haven’t heard of the food value chain previously, it is essentially a network of stakeholders. These stakeholders are involved in the processing, growing, and selling of food that customers consume. In essence, the food value chain can also be considered from farm to table. The food value chain includes the producers that research, trade, and grow food commodities like cattle and corn.
Additionally, it also includes processors that create, manufacture, and market food products like bread and flour. Distributors are also a major part of the food value chain as they market and sell food. Those who purchase the food items from the shop are also members of the food value chain as are governments, NGOs, and regulators who regulate and monitor the food value chain from farm to fork.
Collaboration along the food value chain is more essential than ever before. The world population has been predicted to grow to 9.7 billion by 2050. With this in mind, sustainability and food security are essential to reducing the impacts of climate change and overcoming hunger. Food systems currently are failing to meet the complicated worldwide economic, environmental, and social challenges of the 21st century.
To ensure food security and fulfill the nutritional demands of the world by 2050, food output must be increased by 70 percent. Achieving this goal raises questions surrounding the environmental effect of food production and food systems, both of which contribute largely to environmental degradation. Goal 12 of the Sustainable Development Goals is all about ensuring sustainable consumption and production patterns.
An inclusive and sustainable value food chain strategy conquers the challenge of improving food security. It does this by addressing environmental issues surrounding food accessibility, availability, wastage, and consumption on three different fronts – social, environmental, and economic which directly affect hunger and poverty. We must tackle food production as it is so closely linked to climate change, water pollution and scarcity, global warming, air quality, and deforestation.
How businesses can help reduce emissions
In today’s climate, where we are navigating a climate emergency, we need all businesses to do more to minimize their environmental footprint. The food industry employs roughly 1.1 billion people globally, accounting for around 31 percent of worldwide employment. There are so many easy ways businesses can reduce emissions along the food value chain.
All of the commitments from the food sector will cascade into the suppliers. It will all be translated into action within supply chains. However, supply chains for food products are quite complicated. Each ingredient of a food item begins at an individual farm. It can have multiple links until it reaches the retailer. This includes passing through a processor, a packaging supplier, and a branded wholesaler.
Being aware of each input and output is essential to making the many small changes and adjustments that will curb emissions. The problem is that some enterprises do not have full transparency. This is not their own doing; it is often due to how supply chains are organised and a result of the commodity exchanges. With this in mind, collaborating with other partners is going to be very essential.
It is vital to partner with organisations that are upstream of the farmer. For instance, a fertilizer business, to drive meaningful change from either side. Food businesses are aware reducing their emissions lies in the transparency of and improvement of their supply chains. In saying that, the many requests for formats and data can be a great burden on suppliers too.
In other words, your scope 1 is often someone else’s scope 3. Therefore, it is fair to say that measuring the data and tracking progress toward sustainability is not always entirely accessible. With this in mind, smart ways to capture data are needed.
Why are SMEs crucial to emission reduction along the food value chain?
The truth is, there is no net zero without small and medium enterprises. While small and medium-sized businesses seem exactly that, small, SMEs actually make up a significant portion of our society. They account for 60 percent of total employment and are major engines of value creation, representing between 50 and 60 percent of value-added in OECD economies, according to the GGSD Forum.
Due to their contribution to worldwide economic activity, environmental footprint, and social well-being, SMEs are vital stakeholders in our mission to achieve environmental change. Despite being small in terms of size, SMEs have a large environmental footprint. With all of this in mind, it represents how important of a driver SMEs are for green and inclusive growth.
One sector that has dominated discussions globally due to its need to reduce emissions is the food sector. One key point to look at when discussing emission reduction along the food value chain is the supply chain. Considering the production, land use change, and transport, global food chains are producing approximately 16 billion tonnes of greenhouse gas emissions each year.
Diversifying the food value chain is vital to building resilience. Small and medium enterprises allow for greater agility due to being naturally more innovative, flexible, and driven to take climate action. This makes including SMEs in the food value chain important for those who wish to maintain supply while still achieving ambitious climate targets.
The reality is that food waste is a major problem and one that is only feeding the climate emergency. Therefore, a lot of our efforts to decarbonize the food value chain must be around minimising food waste. As mentioned before, SMEs are a key ingredient that will allow us to pave the way for greening and adapting to climate change across a range of economic sectors including those within the food value chain.
How to reduce emissions along the food value chain
To tackle carbon emissions in the food value chain, we need to establish a more sustainable agri-food supply chain. A lot of work is already underway to address farm gate processes. The focus has even broadened to include both pre and post-production processes. For example, lightweight packaging is assisting in helping reduce food producers’ distribution and operational footprint. Not just that but new processing methods are being applied to maintain food’s freshness.
This also means reducing food waste. Supermarkets are getting involved in this movement by transitioning to recyclable materials and minimising packaging to lessen food waste and curb carbon emissions. Logistics and transport also have a role to play in the food value chain. Implementing changes in transportation practices, opting for low-carbon fuels, and utilising advanced vehicle technology are some ways to reduce greenhouse gas emissions associated with food transport.
Another emerging technology that can help is route optimisation. It is where the drive uses computer software to calculate the most efficient routes. This kind of route planning and optimisation based on changing demand and supply means transport managers can offer high-quality service to their supply chain partners and customers. All the while, they can curb their carbon emissions and their transport costs.
The dairy industry is a great example of this. Milk collection routes are predetermined using a combination of fluctuating factory production requirements and the milk amounts produced on farms. When handling perishable items like milk, using this kind of software to optimise transportation routes can reduce the risk of the milk going bad during the journey. Of course, these solutions also help you reduce the environmental footprint of your fleet.
The food industry is a major polluter and it’s not surprising when you consider the chain of events that occur before the goods even reach the customer. We need to work on decarbonising the industry and creating an inclusive and sustainable food value chain.
This will require the work of many actors, including small and medium enterprises, that are both innovative and forward-thinking. Minimising food waste and optimising the supply chain itself will see us greatly curb the emissions associated with the food value chain. Not to mention, focusing on the value chain results in business growth and more sustainable operations.