Five years ago, McDonald’s announced that it planned to reduce greenhouse gas emissions in parts of its operations by more than a third by 2030. A few years later, the company pledged to be “net zero” – cutting emissions as close to zero as possible by 2050.
But in its latest report, McDonald’s revealed that things were heading in the wrong direction: the company’s emissions were 12 percent higher in 2021 compared to the base year of 2015.
McDonald’s is hardly alone. An examination of various climate-related reports and filings for 20 of the world’s largest food and restaurant companies shows that more than half have made no progress on their emissions reduction targets or have reported increasing emissions levels.
The majority of emissions – in many cases more than 90 percent – come from companies’ supply chains. In other words, the cows and the wheat were used to make burgers and cereal.
And while companies have worked to eliminate plastic in packaging and reduce water use to make their products more sustainable, many large food and beverage companies and restaurant chains are struggling to balance their robust growth in recent years with their climate goals.
As consumer behavior has changed since the start of the pandemic, food companies are seeing significant demand. The war in Ukraine and extreme weather conditions such as droughts and floods also disrupted supply chains, resulting in companies sourcing ingredients and goods from different suppliers.
At PepsiCo, which has set emissions reduction targets since 2015, emissions in its supply chain increased 7 percent from baseline, according to its 2022 climate report. Chipotle, which has set a goal of cutting its emissions in half by 2030, reported a 26 percent increase in supply chain and other emissions in its 2022 report.
“This has to be about performance, not promises,” said Barry Parkin, chief procurement and sustainability officer at privately held confectionery and pet food giant Mars, one of the major companies to report a decline in emissions. “For five years, companies made promises and were celebrated for the quality of their promises rather than their performance.”
The global food system, which is responsible for a third of global greenhouse gas emissions, is under pressure from consumers and investors to develop concrete plans to reduce these emissions. This week, government leaders, corporations, climate groups and activists are meeting in New York City to discuss, debate and protest climate issues.
Many food companies have paid external groups such as the Science Based Targets initiative to set and approve medium- and long-term emissions reduction targets. Many say on their websites and in press releases that they are aiming for net zero emissions by 2050.
“Failure to strategize how companies can integrate growth and innovation into climate action plans increases their exposure to climate risks and their risk of not achieving their goals,” said Meryl Richards, acting program director for food and forests at Ceres, a nonprofit coalition made up of climate activists and investors.
For 2022, for example, Starbucks reported a 12 percent increase in its total emissions compared to 2019 levels. But during that time, revenue rose 23 percent, or $6 billion – a big part of the increase in prices for lattes and cappuccinos – and more than 5,000 new stores were added.
At this point, the company expects emissions to increase, including in areas such as water and waste, “as our business has grown and we have further strengthened our measurement systems,” said Beth Nervig, a Starbucks spokeswoman. “We are at a crucial point on our journey to becoming a resource-positive company.”
In emailed statements, McDonald’s, PepsiCo and Chipotle said they continue to work with suppliers to reduce emissions.
Quantifying and reducing supply chain emissions “are significant challenges and critical pathways to achieving our net-zero goal by 2040,” said Jim Andrew, chief sustainability officer at PepsiCo.
McDonald’s said it was meeting its stated goals, noting that overall emissions at its restaurants had declined and that other metrics showed supply chain emissions had also been reduced. But the company also said several critical hurdles would need to be overcome to further reduce supply chain emissions, including advances in accounting, collaboration within the agricultural industry and additional funding for suppliers and producers.
Still, some companies reported a decline in emissions even as their business grew in recent years.
Mars said it reduced its overall emissions, including its supply chain, by 8 percent from 2015 levels while increasing its revenue by 60 percent. The company’s goal is to reduce its total emissions from 2015 by 50 percent by 2030 and reach net zero by 2050.
“This is not a compromise for us,” said Mr. Parkin, the chief procurement and sustainability officer. “It is a goal that is as important to us as our financial performance.” He said the company aims to spend $1 billion over the next three years on climate-related efforts, including various financial incentives for farmers to adopt regenerative farming techniques .
Unlike financial reports or securities filings for public companies, emissions data is reported voluntarily and is not standardized. And when it comes to supply chains and waste, there is a certain amount of projection, modeling and guesswork on the part of companies. And they still may not disclose all of their emissions in their reports.
In their most recent publicly available climate reports, meat processors Tyson Foods and JBS did not disclose emissions from their supply chains, which include cows, pigs and poultry. Cows are a particular target for climate activists because when they burp, they produce methane, a powerful gas that warms the planet.
Tyson did not disclose its supply chain emissions in its 2022 sustainability report because the company is conducting calculations to improve its reporting, the company said in an emailed statement. It said it expects to disclose supply chain emissions in future reports.
JBS, the world’s largest meat producer whose brands in the U.S. include Swift and Pilgrim’s, has been criticized by climate activists in recent months for the company’s alleged attempts to “green” its progress in reducing emissions.
On its website, JBS says it is the first major global protein company to set a net-zero target for all of its emissions, including its supply chain. But critics say JBS did not have its targets validated by a third-party organization and has not reported its 2022 supply chain emissions or the number of animals it processes.
This summer, a panel of the National Advertising Review Board upheld a decision that required JBS to drop claims related to its goal of achieving “net zero” by 2040.
While JBS has reported supply chain numbers for 2021, critics say those numbers significantly underestimate greenhouse gas emissions.
“We believe they produce significant emissions, but they have very little responsibility for reporting, setting targets, meeting those targets and externally verifying those targets,” said Alex Wijeratna, senior director of the global protein campaign at Mighty Earth , a climate advocacy organization.
Jason Weller, who joined JBS last year as its first global chief sustainability officer, said the company has made disclosures around its supply chain to CDP, a nonprofit that collects and assesses climate disclosures from various companies.
However, those disclosures were not included in JBS’s sustainability report last year as the company continued to improve its data collection in this area, Mr. Weller said. When asked, JBS did not provide the supply chain data submitted to CDP.
For JBS, supply chain emissions include not only the number of animals the company processes each year, raised by thousands of ranchers across the country, and the methane they emit, but also the emissions emitted from their feed how corn is created.
While JBS works to quantify emissions from its supply chain, Weller said there are even bigger questions in the industry, such as whether existing technologies to reduce emissions from cows actually help or whether they are too costly.
And then there is the question of who bears the costs of climate-friendly agriculture: governments, corporations, farmers or consumers?
“It depends on who’s going to pay,” Mr. Weller said. “That’s the topic that’s driving this whole conversation.”