Robust environmental disclosure standards will accelerate change in agri-food supply chains a new report from Savills concludes. Its spotlight report on agri-food sustainability, observes that large companies will be required to report on their climate-related impact through the Taskforce on Climate-Related Financial Disclosures (TCFD) by 2023, with a similar system for nature to follow soon after.
The authors comment that “.. any listed business with exposure to climate or nature risk now needs to disclose that risk. Disclosure means these businesses become less desirable to investors, driving exposed companies to reduce their negative environmental and social impacts. While these regulations are unlikely to apply directly to farming businesses due to their size, many food processors, retailers and some landowners will be impacted.”
Agri-food supply chains already responding according to survey
Some retailers have already responded in preparation. In 2021, Tesco announced it would raise its ambition and require all 14,000 of its fresh produce suppliers to achieve LEAF Marque accreditation. In addition, Nestle has committed to source 50% of its key ingredients from regenerative agricultural systems by 2030 and by Morrisons has pledged to be completely supplied by net zero carbon British farms by 2030.
These ambitions will require farmers to provide evidence of their environmental credentials.
Savills conducted a survey of 100 UK food companies and 34% are explicitly aligned to Sustainable Development Goals and 51% have an emissions reduction target, however, as the authors point out there is wide discrepancy in what these targets actually are.
Supply chains are also impacted by rising costs with Savills estimating that the cost of winter wheat production in the UK for 2023 has increased over 50% from 2021, commenting that increased output prices have preserved margins but reduced the return on investment and that for sectors without commodity pricing mechanisms, the pressures are acute.
Nicola Buckingham, Associate Director, Rural Research, Savills comments: “Supply chains now have an unavoidable responsibility in securing food supply.”
Click here to read the full report.