Carbon, Nutrition, Biodiversity: Navigating the Triple Food System Data Challenge | Henry Dimbleby & Saif Hameed
At the heart of food systems sit three of the biggest sustainability challenges: emissions, health/nutrition and biodiversity. Regulation (or quasi-regulatory efforts) will increasingly mandate action across all three.
We’re starting to understand the goalposts on emissions, while most companies don’t have a real appetite for tackling nutrition. Even further down the backlog is biodiversity, which still seems to be the elephant in the boardroom.
Transitions we can expect to see:
Emission calculation shifts. Companies are pushing hard on carbon. However, current ways of measuring and sharing emissions data (Scope 1,2 &3) are not meaningful. Scope categories are specific to the organisational set-up of a business and are not actually directly comparable e.g., your Scope 3 is someone else’s Scope 1 & 2 but your Scope 3 is actually also someone else’s Scope 3. Top tip: start processing impact data through the lens of products, rather than just through Scopes. Slicing data into products, business activities and input materials is more actionable and makes better business sense.
Nutritional data will be a ‘must’. “The biggest thing holding back the economy is ill health” (Andy Haldane, former Chief Economist, Bank of England). Statutory targets will come in as the Government wakes up to the health impact on the economy. We can expect mandated nutritional data reporting requirements as a result. There are increasing market indications of this with global companies like Nestle publishing their HFSS data. Top tip: approach nutritional and emissions data together. The calculation processes will be similar (taking elements of volumetric data and multiplying by an assumption). Find overlaps in calculations to save resources.
Biodiversity will race up the agenda. With intensified statutory targets (30x30 - a global target to protect 30% of the planet for nature and stop biodiversity destruction by 2030), over the next five years, biodiversity will be seen as important as carbon. You will find yourself being asked if you are hitting Net Zero ***and biodiversity targets. Top tip: Tie biodiversity to revenue. There’s currently a huge untapped opportunity to leverage people’s love for nature with positive brand associations. ‘Organic’ has attempted to do this and biodiversity will be the next wave.
Consumer trends will also drive corporate action on two counts:
Demand for traceability: whether you are looking from a health, sustainability or quality perspective, increasingly consumers want to be involved in the decision-making of what products they are buying.
Guilt-free shopping: To win the hearts and brands of new market segments e.g., LOHAS (Lifestyles of Health and Sustainability), FMCG need to go beyond mainstream messaging. This LOHAS segment is growing fast. It is potentially 5-25% of overall consumers in certain markets.
We’re slowly getting to grips with emissions, but the end game for biodiversity and nutrition is a lot less clear. Increasing digitisation of data management will enable businesses to pinpoint successful initiatives and strategically scale investment across all fronts.
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Where will the emissions data come from?
There are two competing schools of thought in this discussion:
1. Bottom-Up Approach (Primary Data)
’The only reliable, trustworthy emissions data source is from the suppliers themselves. Suppliers should provide primary data (from their farm, business etc) into a centralised and open-sourced database.’
The problem with this approach is that it is prohibitively expensive, especially if you factor in audit costs (since you can’t rely on self-reported data on its own).
2. Top-Down Approach (Extrapolated Data)
’You are never going to get enough primary data for reasonable accuracy. Instead, we should deploy data science and modelling to estimate numbers.’
The problem with this approach is that ‘black box’ modelling (where input sources and assumptions aren’t clear) can limit transparency and credibility.
In reality, you need both approaches working together. Take aluminium cans. The supply chain is relatively short and the players are reasonably large so you can get good primary data of reasonable accuracy. But, for products with more complex supply chains (e.g., cocoa, rice, dairy etc) it's a very different story. The burden of getting good primary data in these cases can be overwhelming in terms of cost, time and energy for many smaller organisations. Here, good data extrapolation can be much more cost-effective.
In a nutshell - primary data gathering, extrapolation and sophisticated data science need to work hand in hand.
Policy Pulse | The Latest Sustainability Developments
A breakdown of the key policy updates that you and your company need to know about from the last fortnight.
The Science Based Targets Network (SBTN) recently launched the first global framework for setting science-based targets (SBT) for nature. SBTN is made up of over 80 NGOs, including WWF and WRI, and works in close conjunction with SBTi who set guidance for SBTs on climate.
What are the new nature targets?
SBTN gives companies the tools to understand their impact on 5 key aspects of nature: freshwater, land, oceans, biodiversity and climate. The first draft of guidance only covers targets for freshwater and land, with SBTi covering climate and future guidance to cover the rest.
Companies have five steps to follow in the SBTs for nature process:
Assess - understanding where a business’s activities have a material impact on nature
Interpret and prioritise - determine target boundaries, and prioritise areas for action
Measure, set and disclose - set models to find baseline nature impact, and set targets for reduced pressure on nature
Act - actions to reduce nature pressures, and restore nature where possible
Track - monitoring and disclosing progress, and adapting if needed
Due to the complexity of nature impacts, there are far-reaching and highly granular data requirements. Companies are asked to collect business activity and nature impact data by:
Scope - Split by direct operations, and activities upstream in the value chain
Pressure - The type of nature impact that activities have, such as freshwater pollution and land use change
Location - The location of activity has deep implications for its impact, so data should be broken down at least at the national level
This data will feed into targets, that are equally granular by pressure and location. For freshwater usage this will look something like, “Company A will reduce water usage in the Thames river basin to X mega-litres a month by 2030”.
How does this fit in with other frameworks?
There are related frameworks in SBTi’s FLAG target setting guidnce, and the Taskforce for Nature-related Financial Disclosures (TNFD). The key similarities and differences are:
This primarily measures the GHG emissions of land-based sectors, whereas SBTN is about the wider nature impacts for all sectors
The similarity lies in what activity data is collected, with both looking at land and fertiliser use data
TNFD outline a similar process to SBTN for understanding and measuring a company’s nature impact
TNFD is focussed on understanding a company's impacts and risks from nature for financial reporting, where SBTN is about setting targets to reduce nature impact
The scope of TNFD is also wider, including downstream and financed nature impacts and impacts on the atmosphere such as air pollution
SBTN has so far released guidance for its first 3 steps, with a smalll group of companies undergoing a pilot target validation process. This will be followed by the target-validation process being opened to all in 2024.
Sustainability Trailblazers: How MAX burgers are capturing the hearts and wallets of a new market segment…
Kaj Török highlights that MAX Burgers’ sustainability profile has driven 10 % extra total visits. By targeting Sweden’s ‘LOHAS’ (Lifestyles of Health and Sustainability) segment, MAX has tapped into a billion-dollar market opportunity. So what is their secret sauce for successful positioning? Here is our take:
Consumer transparency: The first restaurant in the world to have a climate-labelled menu - each item on MAX Burger’s menu includes a CO2e label, satisfying the growing consumer demand for transparency.
New product offering: Sales from MAX’s green range of burgers increased by 1000% between 2016 to 2018. By diversifying their menu and offering plant-based options, they captured the attention of consumers seeking healthier options. This strategic expansion has contributed to a notable 10-15% increase in overall sales for the company.
Bold brand alignment: In a bold move to reinforce its sustainability focus, MAX rebranded, simplifying its name from ‘MAX Hamburgers’ to ‘MAX Burgers’. This deliberate alignment to their core sustainability values has yielded impressive results, with a 40% year-over-year growth in clicks on their listings.
“Our sustainability work has, to our surprise, shown to be more profitable than just opening up new restaurants.” - Richard Bergfors, CEO & Chairman