Task Force on Climate-related Financial Disclosures (TCFD)

Task Force on Climate-related Financial Disclosures is driving the transition to Net Zero

Sustainability reporting has been a requirement for larger companies for many years now as it reduces their exposure to risk. Increasingly organisations will also need to report on their greenhouse gas emissions and the measures they are taking to mitigate their environmental impacts.

Financial reporting is driving the journey to Net Zero from the top of the supply chain.

Chris Brown, Senior Director for Sustainability at Asda, and a member of the Agri-TechE Stakeholder Group, has been investigating how the organisation can comply with the Task Force on Climate-related Financial Disclosures (TCFD) legislation that came into effect in 2023.

Chris says: “2023 was the first mandatory reporting year for TCFD. Although this is still quite top level, and only obligatory for the largest companies, the consensus is that it will tighten in the future and trickle down.”

Asda, in line with other progressive companies, is signed up to Science-Based Targets Initiative (SBTi) a pathway to achieving its commitment to a key goal of the Paris Agreement – to limit global warming to 1.5°C above pre-industrial levels.

The targets aim to ‘reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth’.

Scope 3 emissions from food production require joined up approach

As part of this companies need to disclose their Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. These ‘scopes’ are set out in the Greenhouse Gas Protocol. Essentially, Scope 1 are those direct emissions that are owned or controlled by a company, whereas Scope 2 and 3 indirect emissions are a consequence of the activities of the company but occur from sources not owned or controlled by it.

As most Scope 3 emissions in the supply chain originate from the production of raw materials, a united approach is required to techniques for measuring, monitoring and mitigating emissions at all stages.

We asked Chris how producers can prepare for this; he comments: “We are at the start of this journey and just working out what we need, but my expectation is that once government, or the EU, or one of the big brands, takes the initiative then things will happen very quickly.”

This global move towards sustainability is evident from projects initiated by the speakers on the Supply Chain Panel at REAP, with reporting on their websites aligned to the requirements of TCFD.

Find out more about the TCFD at https://www.fsb-tcfd.org/

Agri-TechE ecosystem supporting the value chain

Auditing can help embed best practice. In addition to de-risking the business it can also offer efficiency improvements. Aethr Associates are supporting companies adopting TCFD and those supplying them, to audit their operations for ESG. Aethr Associates are also keen to demonstrate the other benefits that the reporting can offer.

Online markets for low carbon produce. Legislation around reducing carbon emissions in value chains is encouraging food businesses to pay a premium for low carbon produce. Agrasta is establishing an online platform that gives visibility of producers with good credentials to food and beverage companies looking to reach net-zero targets.

Predicting and forecasting – as ecosystems evolve innovation is multidimensional. The move to regen ag is also driving business process change in the agribusinesses that would traditionally provide inputs. Space-tech company Hyperplan, headquartered in France, is using satellite imagery ground truthed by its customers to provide objective information about crop performance and coverage to help inform new business models.