The climate challenge in agribusiness is visible in degrading soils, declining yields, loss of forest, and smallholder farmers struggling in the face of extreme weather events. For agribusinesses that depend on agricultural raw materials, the bulk of this climate exposure sits beyond their factory gate.
Historically, corporate climate strategies and reporting frameworks have focused on Scope 1 (direct) and Scope 2 (purchased energy) emissions. Scope 3 — which includes all other value-chain emissions upstream and downstream, and accounts for 70-90 percent of the total corporate footprint — was often optional or poorly measured. A first step in the right direction has been taken by Europe, where very large companies are now required to report their Scope 3 emissions.
With Scope 3 impact overlooked, companies are exposed to significant transition risks. Upstream carbon pricing, supply chain disruptions, and future resource scarcity can all increase costs. On the other hand, comprehensive Scope 3 accounting enables companies to anticipate new regulation, avoid reputational risks, guide procurement and design decisions, and align value chains with climate targets.
Existing climate reporting standards tell companies what to count and how to set targets. They do not show which concrete practices — incentives, supplier clauses, pricing rules, verification — actually distinguish leaders from followers in managing Scope 3.
By analysing the detailed Carbon Disclosure Project (CDP) data of 138 big agribusiness companies in the world, the Carbon Barometer provides a comparative ranking that is based on these companies’ emission management. By disclosing their climate and emission reduction commitment in their supply chain, these companies are already moving towards transparency, bridging the gap between intent and action.
The Carbon Barometer shows factors that matter most for agricultural value-chain emissions and how companies can design enabling frameworks that make it easier for them to do the right thing at scale.
Targeted climate finance can bridge the gap between companies’ commitments and supplier-level action, in particular by supporting smallholders’ access to incentives, investment and technical support required for transition to low-emission and resilient production. Here, solutions like regenerative agriculture, climate-smart agriculture, and sustainable landscape approaches can reduce value-chain emissions while strengthening smallholder livelihoods and resilience.
We kicked off this work on 24 September in London at our Scope 3 Performance Workshop, co-hosted with Innovation Forum. It saw an open and frank conversation between leaders across the agrifood sector, finance, government, and civil society on finding innovative solutions to reduce Scope 3 emissions in the agricultural supply chain. Farmers should be active stakeholders in this, the room agreed, and must get their fair share in building such low-emission supply chains.
Going forward, Solidaridad will intensify engagement with all stakeholders, especially companies, on this issue, to build hands-on partnerships that make low-carbon agrifood supply chains a reality.