What SBTi Means for Food & Beverage—And How to Meet Scope 3 Targets

For food and beverage companies, Scope 3 emissions make up over 90% total emissions. This means that companies need to rethink sourcing, packaging, logistics, and supplier engagement. But where do you start?

In this push for sustainability, leading food and beverage companies such as Nestlé, PepsiCo, Unilever, and Mars Inc are pioneering efforts to reduce their carbon footprints.

In this blog, we explore how these top food and beverage brands are tackling Scope 3 emissions while maintaining cost-efficiency and compliance with evolving climate regulations.

Scope 3 emissions represent indirect greenhouse gas (GHG) emissions that occur outside a company's direct operations but within its value chain. For food and beverage companies, these emissions typically arise from:​

• Agricultural production: Emissions from livestock, fertilizers, deforestation, and land-use changes.​

• Supply chain transportation & logistics: Emissions from transporting raw materials and finished products.

• Packaging & materials sourcing: Emissions associated with producing packaging materials.​

• Retail & distribution: Emissions from retail operations and product distribution.​

• Consumer use & waste disposal: Emissions from product usage and end-of-life disposal.​

These emissions are the difficult to track and reduce, but they present the biggest opportunity for impact. In fact, in 2023, food and beverage companies reported that their Scope 3 supply chain emissions were, on average, 23 times greater than their direct operational emissions. ​

1. Complex, Global Supply Chains: The food and beverage industry relies on intricate, multi-tiered supplier networks, making it challenging to trace and manage emissions.​

2. Data Availability & Accuracy: Many suppliers lack the resources or expertise to measure and report their emissions accurately, hindering effective management.​

3. Cost Implications: Transitioning to low-carbon suppliers or restructuring operations can entail significant costs and operational disruptions.​

4. Regulatory Uncertainty: Evolving climate policies require companies to adapt swiftly to new reporting and compliance standards.

Despite these challenges, leading brands are proving that reducing emissions can be both effective and cost-efficient. Here’s how they’re doing it:

1. Supply Chain Decarbonization: Engaging Suppliers for Impact

Collaborating directly with suppliers is crucial for reducing emissions without escalating costs. Leading brand Nestle, has committed to cutting emissions by partnering with farmers on climate-smart agriculture and implementing deforestation-free sourcing, reducing long-term environmental costs and supply chain risks.

Working directly with suppliers helps to lower emissions without inflating costs when implementing regenerative agricultural practices to improve soil health and carbon sequestration, choosing suppliers that are low-carbon ingredient based, and establishing supplier emissions reporting requirements and sustainability benchmarks.

2. Renewable Energy Sourcing: Greener Production Without Higher Costs

Rather than relying on offsets, food and beverage companies are cutting energy-related emissions by investing in renewable energy for both their own operations and their suppliers. This includes signing power purchase agreements (PPA) to secure affordable, long-term clean energy, installing on-site solar and wind power to reduce dependence on fossil fuels, and encourages suppliers to transition to renewable energy through financial incentives.

Beloved chocolate brand Mars Inc. has invested in renewable energy initiatives across 11 countries, including wind farms in Texas and Scotland, helping them reduce their emissions significantly.

3. Sustainable Packaging & Waste Reduction: Cutting Emissions and Costs

Packaging waste contributes significantly to Scope 3 emissions. Innovative packaging solutions can lead to substantial emissions reductions. For instance, Unilever has committed to reducing its use of virgin plastic by 50% by 2025, a move that reduces waste, lowers emissions, and saves costs on raw materials.

To mitigate packaging waste companies can switch to compostable, biodegradable, and recyclable packaging. Using lightweight materials to use fewer resources and lower transportation emissions and invest in circular economy initiatives to expand packaging life cycles.

4. Optimizing Transportation & Logistics: Efficiency Equals Cost Savings

Logistics and transportation play a major role in food supply chain emissions. Companies are reducing emissions while maintaining cost efficiency by using AI-powered route optimization to cut fuel consumption and logistics expenses. They are shifting to lower emissions transportation methods, including biofuel-powered and electric vehicles or are collaborating with logistics providers committed to net-zero operations.

Take PepsiCo as an example, PepsiCo has committed to transitioning it’s fleet to zero-emission vehicles by 2040 and optimizing distribution networks to cut emissions while improving operational efficiency.

As regulatory frameworks for corporate emissions become more stringent, compliance is becoming a financial and operational necessity rather than just a sustainability goal.

The costs of non-compliance, such as penalties, supply chain disruptions, and investor skepticism are pushing companies to integrate emissions tracking and reduction into their business models.

Companies that proactively address Scope 3 emissions will gain a competitive edge, build stronger relationships with sustainability-focused investors and consumers, and future-proof their operations against regulatory risks.

Reducing Scope 3 emissions is a challenge, but you don’t have to navigate it alone. Karbon-X provides tailored sustainability solutions to help food and beverage companies track, manage, and reduce emissions effectively.

From supply chain optimization to compliance support, we partner with brands to drive measurable emissions reductions without compromising business growth.

Get in touch with Karbon-X today and take your sustainability strategy to the next level.