A special report by Solidaridad Asia and the Observer Research Foundation, launched at COP30, encourages agribusinesses to report and act on their Scope 3 emissions. Accountability for Scope 3 emissions is essential for any credible climate strategy in global food systems. It is also a requisite for companies to meet climate commitments, build resilient supply chains and help secure the millions of livelihoods dependent on agriculture.
With a responsibility to feed over 8 billion people, agriculture is also the second-largest source of greenhouse gases. Smallholders, who produce a third of the world’s food, bear the brunt of these emissions. Yet, smallholder farms generate 15 percent fewer emissions per hectare than large-scale farms.
At the centre of the emissions reduction conundrum in agriculture are Scope 3 emissions: those released across a company’s value chain as a consequence of the activities, but originating from sources not owned or controlled by the company. These can be generated through agricultural production, supply chain operations and changes in land use and product use.
Scope 3 emissions typically far exceed direct operational emissions (Scopes 1 and 2), yet they remain the least addressed because they fall outside a company’s immediate control. Although investment in Scope 3 mitigation has grown in recent years, it still accounts for only a fraction of the US$1.3 billion spent in climate finance.
This mismatch is not due to a lack of knowledge about recording and reporting; it is often a strategic choice influenced by business intent and governance preferences. To reduce emissions throughout the supply chain, companies must change their ways of buying, use of raw materials and choice of products.
Addressing Scope 3 Emissions: The business case for companies to invest
Tackling Scope 3 emissions is not just a responsibility– it is a strategic opportunity for agribusiness companies to efficiently combat climate change, unlock capital and address the rising regulatory demands on the global food system.
Climate Resilience: When companies encourage suppliers and smallholder farmers in their supply chain to adopt climate-smart and regenerative farming methods, it leads to healthier soil, improved biodiversity and stable ecosystems. Together, these factors reduce on-farm emissions. Making the farmer climate-resilient is a good business strategy to ensure a consistent and improved supply of raw material.
Investment Targeting and Climate Finance Flows: Companies that make strong Scope 3 promises are more likely to attract investors, lower their borrowing costs and take advantage of incentives for climate action.
Carbon Insetting and Market Differentiation: Carbon insetting—a process that injects money directly into the supply chain to lower or offset emissions through initiatives like funding soil carbon projects or agroforestry— creates shared value. It can help farmers earn more income, increase product shelf life and set companies apart in markets that are becoming more environmentally sensitive.
Inclusion of Smallholder Farmers and Suppliers: Smallholder farmers are central to the agribusiness supply chains. Scope 3 strategies that support and reward smallholders through technical assistance, regenerative project finance or access to carbon markets enhance social inclusion and rural development while slashing emissions.
Recommendations for Agribusiness
The limited disclosure and slow progress in Scope 3 target-setting among agribusinesses reveal a critical gap in climate accountability.
This lack of transparency weakens the credibility of corporate climate commitments and also delays sector-wide progress toward decarbonization. There is a need for the agribusiness to rightly understand, meticulously plan, systematically act and strategically collaborate to address Scope 3 emissions in their supply chain.
Agribusiness companies must participate in regular, standardised tracking and disclosure of their Scope 3 commitments, policies and performance.
Most importantly, companies must ensure that Scope 3 strategies deliver direct value to smallholder farmers who are the primary stewards of land and key drivers of land-based emissions and removals. Therefore, they need to be incentivized to transition to low emission farming through fair pricing and buying and procurement security to support low-carbon production shifts.
In order to be most effective, this must be combined with investments in training on climate-smart and regenerative farming practices, and access to digital tools to improve productivity while reducing emissions on the farm. Finally, it is imperative to ensure equitable benefit sharing from carbon insetting, ecosystem services markets and green financing mechanisms.