Unpacking Greenhouse Gas (GHG) Emission Reporting in the Fresh Produce Industry
As climate change concerns continue escalating, industries are increasingly under pressure to measure, report, and mitigate their greenhouse gas (GHG) emissions. Being at the mercy of weather and climate patterns, fresh produce is uniquely and directly impacted by climate change. Droughts, floods, increased heat, devastating storm events, and shifting seasonality across the globe are impacting growers, farmers, ranchers, and the entire agricultural supply chain.
While agriculture is frequently accused of being a large contributor to the climate change crisis, climate-smart agriculture holds the potential to dramatically shift its global impact.
Below are some of Measure to Improve’s insights into GHG emissions measurements, some of the regulatory and industry drivers moving the needle, and how you can get started in measuring your organization’s GHGs.
Understanding Greenhouse Gas Emissions in Fresh Produce
From field to fork, fresh produce makes a remarkable journey. From cultivation, harvesting, processing, transportation, retail, and ultimately enjoyment, each stage of the journey contributes GHG emissions to varying degrees – and increasingly, companies need to measure those emissions.
The first step for an organization looking to measure its GHG emissions is to establish the boundaries around the sources of emissions it wishes to report. Those boundaries are defined as scope 1, scope 2, and scope 3 emissions.
Understanding the scopes of emissions and how to measure them is essential as emerging reporting requirements are focused on different scopes.
Scope 1:
These emissions are emissions the reporting entity is directly responsible for. They are associated with the equipment or facilities the organization directly owns, controls, or operates. This typically includes fuel for the equipment fleet, natural gas consumption, and fertilizer applications – synthetic fertilizers release N 2 O, which is a potent greenhouse gas. Scope 1 emissions are usually measured using invoices and procurement information for inputs such as fuel.
Scope 2:
These emissions are those associated with the generation and transportation of the electricity used by the reporting entity. They are measured again using invoices for energy procurement and can include generation data from onsite renewables if applicable. Energy efficiency investments and increased use of renewable energy, either from the utility or generated directly on site, is a strategy to reduce GHG emissions from scope 2 activities.
Scope 3:
These emissions are found upstream and downstream from the reporting entity’s scope 1 or 2 emissions. In the fresh produce industry, scope 3 emissions would come from activities such as packaging, fertilizer, herbicide, and pesticide manufacturing (upstream) or transportation to retail, retailer refrigeration, and packaging disposal (downstream). Scope 3 emissions are much more difficult to measure than scope 1 and 2, given that they are out of the direct control of the reporting entity and require additional input from entities up and down the supply chain that may or may not be available.
Emergence of GHG Measurement and Reporting Requirements
Consumers are increasingly making purchasing decisions based on environmental factors. In response, retailers are not just focused on their own operations but are diving deeper into the products they sell, asking suppliers for environmental performance data. Ten years ago, GHG data was a nice to have, but it is emerging now as a must-have if growers wish to sell their produce in certain retailers like Walmart. In 2017, Walmart launched Project Gigaton with the intention of reducing 1 billion metric tons (a gigaton) of emissions in the global supply chain of the products sold in their stores.
While consumers and retailers are major drivers in data collection, reporting, and transparency, regulatory and legislative levers are also being pulled at the same time. In March 2024, the Securities and Exchange Commission (SEC) released a ruling that requires publicly traded companies to disclose their scope 1 and 2 emissions along with climate-related risks and impacts beginning in 2026.
California is also formalizing GHG reporting requirements for companies operating and doing business in the State. CA SB 253 and 261 would require reporting of GHG emissions along with climate risk disclosures, but the extent and which entities will need to report what data have yet to be determined.
While it is unlikely that fresh produce industry suppliers will be included in the early rounds of reporting requirements through either the SEC ruling or the recent California legislation, the industry should take note, use this time to be proactive versus reactive, and prepare for eventual reporting requirements. There is substantial momentum building around GHG reporting and disclosures on how climate change will impact companies, and the fresh produce industry should pay attention.
Co-Benefits of GHG Reporting
There is considerable apprehension in the fresh produce industry regarding these additional reporting requirements. However, measuring your GHG emssions also offers significant benefits. The sources of GHG emissions, if quantified, are typically associated with capital expenditures – energy, fuel, fertilizers, packaging, etc,. When a reduction in scope 1 or 2 emissions is achieved, it can most often be traced to a reduction in operating expenses, improving overhead and revenue forecasts. Measure to Improve has worked with clients who have found incredible cost savings and efficiency gains by formally tracking their inputs as part of their sustainability or GHG reporting initiatives.
A full accounting of scope 1 emissions requires a thorough and robust equipment inventory, which is incredibly helpful for capital expenditure management and/or addressing deferred maintenance within the organization. If GHG savings and operational cost savings can be achieved from the retirement and replacement of old equipment with more efficient equipment, it is further validation for that investment.
If an organization has a firm understanding of its GHG impact, it can also provide a competitive advantage with buyers if they can demonstrate they are measuring, tracking, and taking action to mitigate your impact. This is increasingly desirable for retailers across the country. Additionally, demonstrating a commitment to addressing climate change is a wonderful marketing potential with customers to continue to build brand support.
Get Started and Stay Ahead
As mentioned earlier, SEC and California regulations aren’t requiring much of the fresh produce industry to report on GHG emissions… yet. However, the industry supplies retailers who are required to report their emissions, and retailers are asking for that data and information from their suppliers.
Taking a proactive approach to understand and implement GHG emissions reporting programs in your organization isn’t just going to pay off down the road when it does become a requirement, it has an immediate payoff now, as the industry is already being asked to do so by major retailers.
Are you interested in taking a proactive approach to GHG emissions reporting but unsure how to get started? Reach out to Measure to Improve! We are the fresh produce industry’s go-to sustainability experts and are ready to provide support. We keep our finger on the pulse of the GHG accounting and reporting landscape and can work with you to determine what approach makes the most sense for your organization, guiding you through the measurement, verification, and reporting process. The GHG world can be hard to navigate, but Measure to Improve is here to help.
