The Road to Success in Beef Scope 3 Reductions

I. The New Landscape of Beef Sustainability Reporting

Everyone has heard about the large carbon footprint of beef associated with methane, and that these emissions need to be reduced to mitigate the effects of climate change. A challenge in monitoring and reducing beef emissions is measuring the actual footprint of grazing cattle.

Yet, in the near future, almost all beef sold at the largest retail chains globally will be required to have its carbon footprint calculated. Not only that, but many of the corporations producing and selling beef will need to show that the carbon footprint of those products is declining over time, based on accurate emissions reporting.?

In some places, these requirements come from government regulations (like in the EU and California). For example, California’s recently passed Senate Bill 253, the Climate Corporate Data Accountability Act, requires any large companies doing business in California to report on scope 3 emissions—or emissions associated with the goods they purchase. Reported emissions will be highlighted in a public-facing digital platform, giving consumers and the media transparency into actual climate progress being made. Companies not showing progress on reduced emissions could invite greenwashing accusations and media critique. Outside of required reporting, global corporations have also set their own voluntary commitments to climate action under WWF’s Science-Based Targets Initiative.?

In these reporting exercises, companies have typically used industry averages to report on their greenhouse gas emissions, meaning they don’t have to engage with farmers or collect real farm data to calculate their baseline carbon footprints. However, the increasingly stringent emissions reporting requirements do showcase how much improvement companies are making, pressuring corporations to actually drive down emissions.?

To show actual progress, companies are developing projects that engage producers in adopting climate-smart practices that reduce methane and nitrous oxide, or increase soil and tree carbon. Such financial investment allows companies to show that they have had direct impact at the field or pasture level and driven real, verified carbon reductions. These projects require producer engagement, without which companies will struggle to demonstrate significant improvement.?

Companies that successfully engage grazing operations within their supply chains, invest in practice changes, and track accurate data will be in the strongest position to meet the needs of current and future regulations and protocols around emissions reporting.?

II. Moving from Small Pilots to Streamlined Scope 3 Programs in Beef

For companies to show real progress, particularly those needing to reduce emissions 30% by 2030 under STBi, they’ll need to create scalable programs that quantify the climate impact of corporate climate investments.?

Yet corporations have been hesitant to launch large-scale climate programs due to a few sources of uncertainty:

• What will future requirements from industry-accepted protocols look like around traceability and claimability?
• What practices are producers actually willing and able to adopt?
• What science will back the impacts of grazing practices on soil carbon, and at what cost?
• How do companies distinguish soil carbon changes due to practice changes versus natural shifts in weather??

These sources of uncertainty keep sustainability executives up at night. Yet in the context of this uncertainty, corporations can still take action on beef emissions by adopting several key risk mitigation measures:

1. Diversify investments across the carbon cycle and geographies. Research is still needed around soil carbon on grazing lands, which companies can expedite through strategic investments that will help clarify the soil carbon opportunity in arid environments. Beyond soil carbon, there is a clear opportunity to improve the carbon footprint of beef through productivity improvements and reduced fertilizer use. Today, the cost of quantification is lower for these interventions, given the larger body of evidence supporting livestock emissions models.?Given the strong influence of ecological context on livestock emissions, companies can also mitigate the risk of single projects not achieving estimated carbon reductions by diversifying investments across geographies with different soil types, precipitation levels, and management practices.??
2. Use rigorous data collection approaches and models. The higher quality the data collected, the lower risk a company faces in overreporting carbon impact. This means field and animal level data to the extent possible, including detailed records of livestock movements, forage consumption, fertilizer application, and tillage. Collecting this data allows for the real impact of practice change to be estimated compared. Digital records also enable producers to 1) measure the impact of new practices on productivity and profitability and 2) unlock insetting payments.?
3. Use incentives to engage producers, and rapidly test producer interest. For a company to assess the actual feasibility of a climate-smart practice at the farm or ranch level, producers need to be supported in the journey both financially and with technical assistance. With such support, including accurate digital records and carbon footprints, a producer can move from “I think I have improved” to proving it and being paid for progress.?

III. What it Takes to Successfully Engage Producers?

Some countries have more traceability in beef supply chains than others. For example, many Australian grocers have direct relationships with their source farms. In the US, in contrast, most cattle are sold at auction, leaving retailers with little idea of the history of the beef they sell.?

In places like Australia with more traceability, some companies are taking a stick approach rather than a carrot, requiring producers to report on and reduce emissions as part of “the new normal” of market access. In these programs, producers may not be incentivized or supported in taking on new practices, putting the burden largely on the farmer. Yet some are investing in streamlining the carbon calculation process so that the reporting burden on producers is reduced. (See the AgriWebb-Ruminati integration to learn how carbon footprinting can be streamlined through APIs.)?

Alternatively, companies can more directly support producers by investing in practice change and gathering the necessary data for reporting, sharing in some of the risk and burden of the new regulatory landscape. A critical part of this approach is knowledge dissemination, supporting producers in understanding how a specific practice change can positively impact their own operations.??

Similarly, in the financial industry—which is also now reporting on the carbon footprint of financed emissions (e.g., loans to farmers)—some companies are investing in new sustainability programs that support producers through green loans and Sustainability-Linked Loans.

The producer-focused engagement model is seeing particularly rapid progress today in the U.S. From projects funded by the US Department of Agriculture to new corporate insetting programs, this model entails directly supporting producers for reducing their carbon intensity and providing the required data to prove it.?

This approach may be the result of the US beef industry having little traceability, where a retailer without traceability has little ability to require producers to take climate action or report their data. Instead, the retailer must incentivize producers to be involved, either in the form of direct payments for practices or payments for carbon outcomes (i.e., inset credits).?

Will producers come to the table for corporate climate action programs? That depends on the incentive price offered, whether the producer has already signed an offset contract, and how burdensome the new practices and data collection are.?

Aligning with producer goals is most likely to get producers to the table. Programs that focus on efficiency and productivity improvements will likely have the most traction with producers, as these goals align with their business goals. In fact, according to a recent study by Sarah C. Klopatek, PhD and others, the top reasons that US ranchers adopt a “sustainable” practice is not environmental impact, but profitability and animal health.?

Today, methane-focused inset prices may be well above soil carbon offset prices, predicted to be around $80-120/ton of CO2e. We can expect avoided methane credit payments to be higher than agricultural soil carbon offsets. Why? Because avoided methane is permanent and there is no risk of reversals due to wildfire or plowing. Also, corporate sustainability programs also have to compete with the carbon offset market with attractive inset credit prices.

It’s worth noting that in the US, the majority of beef cattle are on grazing operations with 20 to 500 animals (USDA NASS). The smaller the operation, the less likely they’ll want to take on burdensome reporting requirements. These producers will only be responsive to simple, streamlined requirements. To be successfully engaged, ranchers need user friendly, plug-and-play programs. New technology solutions are enabling this kind of program automation, including digital integrations between data platforms, carbon calculators, and Measurement, Monitoring, Reporting and Verification (MMRV) software. To see how AgriWebb is advancing these efforts with our partners, visit our sustainability page.?

Conclusion? While sustainability reporting protocols are being set by standard setting bodies, corporations have several opportunities today to demonstrate leadership in climate action around beef emissions. The risk mitigation measures outlined above can be used to address the near-term uncertainties and challenges related to beef and grazing lands. With programs designed around producer needs, transparency, and rigorous quantification, there is a clear road forward for the industry.?

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Acknowledgement. The content of this piece was informed by contributions from a number of thought leaders during a recent panel hosted by the Global Roundtable for Sustainable Beef (GRSB) , including speakers from 麦当劳 , The Context Network , Elanco , and AgriWebb .

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Thanks for tuning in! If you’d like to learn more about grazing lands and carbon opportunities,? please use the links below to read my previous series “Grazing Operations Face a Changing Carbon Industry”:?

• Part 1. The carbon tradeoff
• Part 2: Upheaval in the carbon offset market
• Part 3: The value of digital farm & ranch records
• Part 4: The science around rotational grazing and carbon