Agrifood companies’ efforts to achieve carbon neutrality have been uneven, according to a report from the European Bank for Reconstruction and Development and the United Nations Food and Agriculture Organization.
Some agrifood companies have identified a specific competitive advantage and are exploiting it to become the pioneers for achieving carbon neutrality and also for marketing and promotional purposes, according to the report.
However, both, farmers and agribusinesses face barriers to carbon neutrality. These include land property rights, infrastructure and access to technology, adoption costs and access to finance, the report said.
Another problem for carbon-neutral efforts is that consumers are often unwilling to pay a premium for carbon-neutral products, the report said. Besides technical and methodological problems, the lack of a clear governance framework hinders more decisive action on the part of agrifood businesses and also fails investors and consumers.
The report said the private sector had much to gain by decarbonising agrifood systems — including reducing costs, mitigating risks, protecting brand value, ensuring long-term supply chain viability and gaining competitive advantages.
The report identified five action areas to reduce the distance towards achieving carbon neutrality in agrifood systems:
The report noted that there was a strong need for better, more standardised tools and methods for collecting data and measuring, reporting and verifying emissions and also for sound governance mechanisms to guide low-carbon investment and private sector compliance.
In particular, improved regulations and institutional solutions can lead to greater development of carbon markets, as well as creating more opportunities for green finance.
The report, Investing in carbon neutrality: utopia or the new green wave? Challenges and opportunities for agrifood systems, was released June 22, 2022.