There has been much discussion lately about the reporting of scope emissions, but the topic isn’t new. What is new is how it may affect the world of agriculture.
The EPA created its Center for Corporate Climate Leadership back in 2012 to “establish norms of climate leadership by encouraging organizations with emerging climate objectives to identify and achieve cost-effective greenhouse gas emission reductions while helping more advanced organizations drive innovations in reducing their greenhouse gas impacts in their supply chains and beyond.”
Like any other government initiative, this requires a hefty amount of data. These emission outputs are broken down into three categories:
• Scope 1: Emissions from operations that are owned or controlled by the reporting company. Emissions come from combustion in owned or controlled boilers, furnaces, vehicles, etc.; or emissions come from chemical production in owned or controlled process equipment.
• Scope 2: Emissions from the generation of purchased or acquired electricity, steam, heating or cooling consumed by the reporting company. This includes the use of purchased electricity, steam, heating or cooling.
• Scope 3: All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. This includes the production of purchased products, transportation of purchased products or the use of sold products.
That final category, Scope 3, is what may end up affecting farmers. Any corporation that purchases farm-raised goods for sale may begin requiring reporting of these emissions. An estimated total of 87% of ag emissions are Scope 3.
J.J. Jones, executive director of the National Institute for Animal Agriculture, hosted an open forum on the topic at this year’s Farm Bureau Fusion event.
“We don’t want to be just on the table but at the table” when it comes to who has to report what regarding scope emissions, Jones said. “We all have things we need to do but would rather not – documentation, regulations, troubleshooting new equipment, financing that new equipment. The new environmental economy means there’s a new group of people to learn and work with.”
He followed up by noting that “sustainability” is no longer a buzzword. At this point, it’s a trend, not just a fad. It has goals, it’s become monetized – and so the government is becoming more involved and consumers have emotional attachment to it.
“That changes the whole conversation,” Jones said. So those in ag need to look at ESG – “the triple bottom line.” (Get ready for more terminology.)
According to the Corporate Finance Institute, “ESG is a framework that helps stakeholders understand how an organization is managing risks and opportunities related to Environmental, Social and Governance criteria … ESG takes the holistic view that sustainability extends beyond just environmental issues.”
CFI explains that ESG evolved from other historical movements that focused on health and safety issues, pollution reduction and corporate philanthropy. It’s changed how capital allocation decisions are made by many large companies and asset managers. And an emerging class of ESG specialists is stepping into the industry and supporting both net zero and carbon neutrality goals – topics farmers have already begun tackling.
Jones asked what lessons agriculture can learn from past situations regarding emissions. Answers included educating everyone about practices farmers are already doing on their farms. They suggested keeping sustainable practices incentive based, not mandated. They also said they need more outreach to the public – they can see the cues in social spaces.
“Farmers can be in the driver’s seat to engage all parties,” one farmer stated.
The group noted it’s best to be proactive in this realm, to highlight the good already being done so people see that first. It would also behoove those wishing to implement an ESG framework to make it profitable for producers.
Jones mentioned the National Pork Board did a great job showing where they were and how they have improved regarding emissions.
“How do we figure out solutions rather than fight against ESG?” Jones asked. “We need to learn about scope emissions to be proactive. They’re associated with ESG goals, policies, rules and regulations. They’re of keen interest to consumers. They’re part of a balance – environmental/societal benefits and production benefits. And they’re part of investor and corporate investments.”
There’s already a lot of paperwork associated with farming these days. If agriculture can become more vocal about why they don’t need to report every single piece of equipment, every practice or even every animal that may create emissions, they can spend more time doing what they need to do.
To learn more about the Center for Corporate Climate Leadership – and to reach out to them to share your opinions – visit epa.gov/climateleadership.
by Courtney Llewellyn