How can food service and manufacturers measure and cut scope 3 emissions? The answer is data.

Ask any foodservice company where their biggest challenges lie with regards to ESG and you can bet ‘scope 3 emissions’ will feature in the top three. These are the greenhouse gas (GHG) emissions that companies have far less control over, but make up the lion’s share of catering, restaurant and hospitality business footprints.

Consider Compass Group, for instance, which emitted a total of 1.077MtCO2e in FY2023 across its UK and Ireland business, 99.7% of which were scope 3. Just 2,870tCO2e and 671tCO2e were scopes 1 and 2. At fellow contract caterer Sodexo it’s a similar story. In its UK and Ireland business scopes 1 and 2 account for just 1% of the company’s total emissions of 689,172tCO2e; the rest are in scope 3 (or ‘indirect’ emissions). Most of those relate to energy at client sites (53%) and within Sodexo’s supply chain (34%), which includes food ingredients. There are also scope 3 emissions relating to employee commuting (9%) and client site waste (3%).

A number of other companies have published their GHG emissions in similar levels of detail. Some are completely transparent, while others have been accused of greenwashing for hiding parts of scope 3 emissions or even ignoring them altogether in ESG updates and reports. These are the emissions that really do matter for caterers, restaurants, hotels and pubs.

So what progress has the sector made towards reducing scope 3 emissions and what are the biggest challenges as we approach the run-in to short-term 2030 targets?

Cast around at recent reports on carbon reduction progress and it’s a mixed bag of results, as well as a multi-layered approach to reporting them. The fact that a number of high profile – and high emissions – companies are producing more carbon than they did when committing to net-zero is concerning. So too is the reticence to share climate data publicly.

In June, CDP and Boston Consulting Group reported that food and drink companies at large remain sheepish about showing their scope 3 emissions (which were calculated to be on average 23 times higher than scopes 1 and 2). The share of scope 3 supply chain emissions reported to CDP by food and drink companies is just 12%; in hospitality the figure is 5%. The findings – which also covered a number of other sectors – show the challenge of measuring scope 3 “is widespread and spans industries”, explains Sonya Bhonsle, director of strategic accounts at CDP, the climate disclosure platform. “Meaningful strides toward emissions reductions require corporates to evaluate their full supply chain, then raise ambition and take accountability,” she adds.

Emission possible

These are still relatively early days in the net-zero journey – and everyone is learning as they go. Progress is also harder than anyone imagined. As Mike Barry, long-time director of sustainable business at Marks & Spencer and now a consultant, put it in an interview with Raconteur in 2021: “When you were reducing your carbon footprint by 3% a year or reducing plastic use by 2% a year, you could do it on your own. But now, with net-zero goals, we need to fundamentally rebuild value chains.”

Foodservice businesses in growing numbers now realise this, which has led to them to join collaborations like the Zero Carbon Forum (ZCF), which counts the likes of Azzurri Group, Burger King UK, Marston’s and Pizza Hut among its members. The forum started out with a purpose to define a clear methodology for measuring scope 1, 2 and 3 emissions. There was also action around scopes 1 and 2, which are easier to affect and tend to deliver short-term cost savings (through energy efficiency, for instance). Scope 3 was discussed but there was no collective focus on these supply chain emissions.

Almost three years on and some of the pioneers in this space are moving into the weeds of their scope 3 emissions, including the category related to ‘purchased goods and services’ – which is a hotspot for every part of the foodservice and hospitality sector. Some, like Compass UK&I are making significant changes to their methodology to improve the data they have. Applying specific emissions factors enables companies to compare different products and items in a level of detail that becomes “almost non-negotiable” with FLAG (forest, land and agriculture) submissions looming for many, explains Foodsteps head of customer success Harriet Jordan.

At WSH, the group that owns foodservice brands including Baxter Storey and Benugo, 99% of the emissions are scope 3 and 87% of them in purchased goods and services, explains Mike Hanson, the company’s director of sustainable business. This means looking at everything from methane-reducing feeds for the cows that supply the milk to make the morning lattes to encouraging people to eat more beans and less (and better) beef.

Scope 3 emissions found within the supply chain are much harder to tackle and require systemic solutions. “It’s the really thorny bit,” explains Bob Gordon, forum director at ZCF. Food supply chains are hard to influence acting alone – something that even the major supermarket chains are facing up to. Food companies talk of hitting the “carbon wall” in their race to net-zero – where they have madereductions within their control, and are now looking at changes to the global food supply chain for further reductions.  

It’s worth noting there are low hanging fruits in scope 3. Food waste is among them: reduce food wasted and the emissions in purchased goods and services falls too (because you are not buying so much produce). The likes of Sodexo and Azzurri both highlighted in recent progress updates the role of reducing waste in curbing their emissions. “Total food service GHG emissions during FY20 were 790,792tCO2e,” noted Sodexo in its Social Impact Report published in June, and cutting food waste has “played a key role in reducing these food service GHG emissions by 21% to 624,812 tCO2e during FY23”.

Now it has some of the thornier issues to grapple with, like reducing emissions from high carbon food groups and shifting customers, consumers and chefs towards lower impact choices. And when it comes to topics like sustainable diets, and adopting less and better meat and dairy options, the devil is very much in the detail.

How stats sell

Sectors and brands are already starting to compete on carbon footprints. Arla, the dairy cooperative, has been footprinting farms and benchmarking members in a bid to drive emissions down, while First Milk has set a target to reduce emissions at farm level by 50% by 2030 – its latest update, in 2023, showed a 9.6% (82,969tCO2e) reduction compared to the base year.

Dairy is under considerable pressure to dramatically reduce methane emissions as it battles the growing popularity of plant-based options that boast far lower footprints. Azzurri reported recently that in terms of scope 3 emissions “our biggest win has been in our food category, where we increased vegan options and diversified our meat options, reducing the overall impact of red meat in our footprint”.

Understanding the differences between product footprints is a quagmire foodservice brands must wade through. Consistency in calculations remains a hot topic; news recently that the methodologies for calculating on-farm emissions could become harmonised is welcome for those keen to compare apples with apples. UK producers of meat are also keen to produce carbon footprints that will help sell the sustainability story they have long been telling.

Alternative proteins have also joined the number crunch. They will generally beat their traditional dairy and meat cousins in a straight footprint race but the technology is improving to ensure the claims being made are accurate. In May, UK climate tech start-up Foodsteps together with the Good Food Institute launched a new footprinting tool for alt-protein brands. The tool – developed with input from over 30 manufacturers, including Quorn and Tofoo – allows manufacturers to conduct life cycle assessments (LCAs) of their ingredients across key sustainability metrics, such as greenhouse gas emissions, land use and water consumption. Alt-proteins could help “dramatically decarbonise” our food system, explains Foodsteps founder Anya Doherty. “Yet manufacturers currently lack access to data to understand and communicate the ‘green impact’ of their products to investors, retailers, and consumers.”

This is a crucial point, according to Gordon, who cites a recent example at Groundswell, the annual gathering of experts in the field of regenerative and agroecological farming. While there he heard from a rapeseed oil producer that has 200 tonnes of regeneratively-farmed product to sell – and had the data to show some impressive reductions in GHG emissions. “Without data you are buying stories,” says Gordon. “Let’s stop buying stories and start buying data.”

Data decision-making

To tackle scope 3 emissions, food businesses must understand the impact of different ingredients, and how those emissions grow from the moment a carrot is planted or a chicken is born.

WSH’s Hanson is someone who loves crunching such numbers. One recent example involves blueberries – a fruit the company spends hundreds of thousands of pounds on every year, and which are flown in out of season due to their perishability. “I worked the numbers for 2023,” he explains, “and if we only bought UK [blueberries] in season and UK frozen [for out of season] we would reduce our emissions from blueberries by 90%. I’ve got a list [now] of all of the other frequently flown products [to work on]. I’ve never known a time when data is so important,” he adds.

Hanson is among those building a more granular dataset for scope 3 emissions – and this can actually create savings. WSH has for example ‘saved’ 6,000tCO2e after moving from generalised data on staff commuting to more specific statistics based on three simple questions in its annual survey: how far do you travel to work; how often do you travel; and how do you travel.

A declining footprint due to better data is good for business, but some have concerns about how this is portrayed. “What we sometimes see when you improve your data, is you get lower emissions factors,” says Gordon. “I think a lot of companies are going to claim these reductions in their scope 3, when nothing has actually changed in their business.”

The likes of WSH, Sodexo and Whitbread have all been up-front about exactly why their emissions have fallen. The latter’s FY22/23 report noted that “the driving factor” in its 13.8% reduction in absolute scope 3 emissions was “an improvement in data granularity leading to a more accurate representation of our actual scope 3 emissions”. The reduction of 16.1% in emissions from purchased goods and services (products) was also largely down to modification of methodology. “Our 2022/23 assessment contained a more granular dataset meaning that less assumptions had to be made throughout the calculations. Information such as: packaging weight, packaging type, mode of transportation and distance travelled all allowed a more accurate representation of our scope 3 emissions to be calculated.”

Improved data is part of the puzzle but companies can’t rely on them to reduce emissions by default. The real value will be in using these data to pull the right levers to deliver improvements.

This has hospitality companies thinking outside the box. Better scope 3 data means hotel chains realise the importance of key ingredients way down their supply chain, like the soya used to feed the pigs that end up in the morning buffet as bacon. Brewers are beginning to understand the role that regenerative approaches could play in reducing GHG emissions from the barley they buy. And caterers recognise how important enhanced supplier collaboration will be to both improving data accuracy and decision-making.

Some restaurants are also getting into the weeds of the contributions their ingredients make to scope 3 emissions. Dough is among the top five ingredients that directly contribute to Ask Italian’s food emissions, for example, so it’s launched a new pizza dough using Wildfarmed flour, which reduces the carbon intensity of the dough by 50%, according to calculations by Foodsteps. Zizzi is also using the flour in a pasta dish that scored ‘very low’ on Foodsteps’ carbon rating scheme. Azzurri, the group which owns the chains, wants 65% of its menus across brands, which also include Coco Di Mama, to consist of low or very low carbon options by the end of the decade.

Adding Wildfarmed regenerative flour to the dough at ASK Italian, and using plant-based ingredients in the tiramisu overnight oats recipe have both brought emissions savings. “We’re now starting to focus on opportunities with some of their dairy suppliers, always with moving the needle at scope 3 level in mind,” says Foodsteps chief impact officer Andrew Stephen.

Easy targets?

In the run-up to COP29, taking place in Azerbaijan in November, company climate targets will be scrutinised. The short-term 2030 carbon reductions set through the Science-based targets initiative and now incorporating a framework for FLAG emissions will present further hurdles for foodservice companies. The technology, data and frameworks are all improving and COP will be an opportunity to galvanise the food sector.

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If your food business or suppliers are looking into how they can measure, report and reduce their scope 3 emissions related to purchased goods and services, get in touch with our team to find out how Foodsteps can help you.