Sustainability is becoming a topic that big businesses, grocers among them, cannot ignore. 37% of European consumers deeply care about sustainability irrespective of which generation they belong to. Many consumers are already paying more for sustainable options. What’s more, governments and institutions are introducing laws to reduce emissions. An increasingly popular concept is net zero emissions. But what are they exactly and what do they mean for the grocery sector? This is what we will share with you in this article.
What are Net Zero Emissions?
Net zero emissions mean that as many greenhouse gas emissions are taken out of the atmosphere as are being produced. It is like a scale, the emitted emissions pull one side of the scale down and the goal is to take out enough emissions, so the scale becomes balanced. This is essential to stave off the looming climate catastrophe.
To positively affect the environment, we will need to tip the scales the other way to make up for the human-made emissions of the past. But for now, a more realistic goal is to aim for a net zero emission balance.
Direct and Indirect Emissions (Scopes 1-3)
Currently, the food system accounts for more than 30% of global greenhouse gas (GHG) emissions. However, when it comes to grocers, the situation becomes quite complex. Grocers’ direct emissions only make up a small part of the overall emissions created in the food chain. A much larger part is made up of Scope 2 and 3 emissions.
Scope 1: Direct emissions from grocers’ operations
Scope 2: Emissions from the generation of electricity and heat that grocers use
Scope 3: Emissions from agriculture, food processing, transport, consumption and waste
According to McKinsey, Scope 1 and 2 emissions only account for about 7% of the total, while over 90% of emissions are outside grocers’ direct control. Yet, this does not mean grocers should ignore these indirect emissions. Instead, they can leverage their unique position as intermediaries between producer and consumer to advance decarbonisation efforts.
Reducing Scopes 1 & 2 as Grocers
Were you aware that energy consumption in stores can be reduced by 30% - 50% simply by modernizing lighting, refrigeration, heating, ventilation, air conditioning, and cooling? Saving energy in stores is, however, only one of many decarbonization opportunities for grocers. Here is what you can do as a grocer to reduce Scope 1 & 2 emissions:
Many grocers can considerably reduce their emissions by optimising operations. This includes increasing the temperature in fridges or finding a better route for vehicles moving from warehouses to stores. A larger endeavour is to replace all vehicles with electric ones. Retailers that are also producers can make their manufacturing process more efficient and sustainable, e.g. by using heat emissions from production to generate electricity and by reducing or recycling waste.
Interestingly, investing in emission reductions can also be a smart move for retailers’ bottom line. Reducing emissions can result in lower costs due to higher efficiency. The only thing to be aware of is that payback periods for decarbonisation investments can be slightly longer. But be aware that short-sightedness in business will come back to haunt you.
Tackling Scope 3 as a Grocer
As we mentioned before, a vast majority of grocery emissions occur during production and consumption and are therefore not under the grocers’ direct control. Tackling these emissions is both more difficult and at the same time more important.
Here are four strategies to reduce Scope 3 emissions as a grocer:
This is certainly an emerging trend. In Vienna, the first Austrian fully plant-based Burger King opened in July 2022. In September, one of Vienna’s leading grocery retailers opened the first completely plant-based grocery store called Billa Pflanzilla.
Grocers should help farmers understand how to decrease emissions and provide access to funding. One company that has put a lot of effort into minimising the emissions of the farmers they work with is European dairy company Arla. With the help of Lifecycle Assessment consultants, they calculated the CO2 footprint of the almost 8000 dairy farms they work with. They discovered that the footprint of the milk produced by their farmers was half of the global average.
Grocers can collaborate with smaller suppliers to optimise product design and decarbonize their operations. As smaller suppliers tend to lack the resources to realise decarbonisation on a large scale, grocers can support them by setting science-based targets and providing analytical support.
When it comes to working with large food companies, who have the resources to conduct their own calculations, grocers can offer these companies incentives to set more ambitious targets to decarbonise their operations.
Ideally, all food products should feature labels informing the customer about the impact of the product on their health and the environment.. We at inoqo calculate the impact of your food products accross eight different impact dimensions and provide you with a clear label.
Three Grocers Already Committed to Scope 3 Net Zero
Many grocers all over the world are setting ambitious targets when it comes to net zero. Here are three examples.
The trailblazer of the grocery industry is committed to being net-zero in Scope 3 emissions by 2050. To achieve this, they plan to work closely with their suppliers and are going to release a Scope 3 climate roadmap to net zero, which will point out key actions for their supply chain.
When it comes to Scope 3, Sainsbury’s is aiming for net zero by 2050. To that end, Sainsbury’s has already asked 400 of its top suppliers to share their carbon reduction targets.
Aldi (aka Hofer)
The retailer has asked suppliers to set Science Based Targets by 2024 to reduce Scope 3 emissions. In 2025, the company wants selected suppliers to put climate footprint reductions in their operations into practice.
It is clear that lowering emissions is non-negotiable for grocers who want to remain successful in a future where the push for lower emissions is increasing rapidly.
Starting your net zero journey with our support
We at inoqo measure the impact of your food products across eight different categories including animal welfare, biodiversity and social impact. Our insights can help you on your journey to net zero. Here’s how:
Step 1: We calculate your product impact across all three scopes
Step 2: We provide consultation on how to decrease these emissions
Step 3: You communicate the optimised impacts to the consumer via food labels
If you are ready to tackle your emissions and would like to understand our methodology further, simply reach out to us at firstname.lastname@example.org.
https://www.climatecouncil.org.au/resources/what-does-net-zero-emissions-mean/ https://www.mckinsey.com/industries/retail/our-insights/decarbonizing-grocery https://www.foodnavigator.com/Article/2021/04/28/Arla-leveraging-data-to-decarbonise-dairy-There-can-be-a-sustainable-future-for-dairy# https://www.just-food.com/analysis/the-road-to-net-zero-big-foods-emission-pledges/ https://bren.ucsb.edu/projects/accounting-reductions-carbon-footprint-zero-waste-grocery-store