By reducing carbon emissions and increasing biodiversity, the food and drink industry has the best chance of achieving some of the greatest green successes.
“Food production can impact biodiversity and ecosystems because they are closely linked,” explains Tom Mason, deputy director of Nature Positive. “However, these supply chains play a crucial role in achieving positive impacts on biodiversity and ecosystems.”
At the beginning of the food supply chain, Mason explains, farmers are the “critical stewards” of the world’s soil, a major carbon sink and land, giving them direct control over how landscapes are used and maintained.
Agriculture is estimated to be responsible for around 80% of natural habitat loss (FAO and TNC, 2021), so better control is needed to protect not only plants and animals but also the global food supply.
Practices such as regenerative agriculture, for example, are becoming increasingly important for the supply chains of food and beverage companies and their investors. Biodiversity loss and climate change are considered “systemic risks to the entire food and beverage supply chain, and regenerative practices are seen as a critical step in building supply chain resilience,” says Mason.
Regenerative agriculture focuses on reducing the use of harmful chemicals and optimizing land management practices – to promote healthy soil, clean water and disease resilience – as well as creating and restoring habitats as part of the food and beverage supply.
What influence do birds and bees have on food production?
But why is it so important for the food and drink industry – from farm to fork – to pay more attention to biodiversity and environmental protection? And what impact can this actually have?
This is important because the food and beverage industry relies on a healthy environment for its continued production and profitability. Since bees, birds, bats, beetles and other pollinators directly contribute to 5-8% of global crop yields (WBCSD 2023), ensuring a mix of habitats helps build pollinator populations and can logically improve yields. The decline of global pollinators is putting $577 billion worth of crop yields at risk, says the UN Environment Programme’s Facts on the Nature Crisis report.
In fact, according to the World Economic Forum, the world’s three most important staple foods, rice, wheat and maize, have already seen production losses of around 16 percent due to a lack of biodiversity, poor land management practices and invasive species.
“Even elsewhere in the supply chain, food processors and packagers have enormous opportunities to invest in circular economy initiatives,” Mason continues. “They can increase recycling rates, eliminate plastics – and therefore microplastics – from their products and packaging, they can introduce closed water loops to reduce water use, and invest in low-carbon energy systems to reduce overall emissions.”
In the two years to 2023, private equity firms have invested heavily – $1.4 billion – in regenerative agriculture start-ups to curb and reverse negative impacts on biodiversity, according to a report by the FT.
Such investments do not just serve the vanity of investors. In North America alone, regenerative agricultural practices have increased the resilience of supply chains by around half, as a study by the Boston Consulting Group for the WBCSD shows.
Advances in the processing of biodiverse foods
“The business model for the food and beverage sector, and by extension the agricultural and food processing supply chains, is that a destroyed natural environment is simply bad for business,” explains Mason. “The destruction of destroyed ecosystems (soil and water quality, pollinator populations) requires restoration with additional operational costs.”
However, progress in biodiversity farming would be counterproductive if efforts were not also made further up the chain to counteract the environmental damage the sector causes through production. “The challenges of decarbonisation in the process industries are multifaceted,” says engineering consultancy Niras in its Decarbonization in the process industry report. “These include the dependence on fossil fuels for high-temperature processes, the need for significant investment in new technologies and the new complexities in integrating renewable energy sources.”
Ways to reduce and limit carbon emissions in food and beverage production include better energy management through the use of energy efficient technologies and processes, optimising processes, for example by reviewing and refining workflows, using renewable energy on site or through suppliers, agreeing better practices with suppliers or sourcing from more sustainable suppliers, and continuously reassessing processes and involving colleagues in the challenge of achieving better results.
Manufacturers will not be able to reduce or significantly reduce CO2 emissions at all stages of the process. The transport sector remains one of the more difficult areas, as the transport industry – including food and beverage production – is responsible for over 7.3 billion tonnes of CO2.
But manufacturers can and have made progress, for example by reducing the amount of packaging or sending semi-processed products to countries where they are further processed and packaged (such as some concentrated foods and beverages).
“It’s really hard to identify one (big) thing (that the food and beverage industry should focus on),” Mason says. “There are a whole range of things to do at every stage of the supply chain. Farms need to prepare for and mitigate future climate risks, and downstream packers and producers need to increase their circular initiatives to reduce water use, for example.”
And while improvements have been made across the chain, there is still much work to be done. But that is easier said than done, with Mason pointing out that there remains a significant global funding gap in nature-based solutions, with most existing funding focused on reducing carbon emissions rather than biodiversity, despite acknowledging the importance of the former.
