A new report published by The Changing Markets Foundation has concluded that supermarket chains are not doing enough to address emissions from dairy and meat.
According to the paper, major food retailers from Walmart to Carrefour are in a unique position to influence change but most are ‘failing’ to implement measurable actions that address emissions from animal agriculture.
“For retailer climate plans to be credible, they must adhere to science and set methane reduction targets of at least 30% by 2030 (from a 2020 baseline), backed by a comprehensive plan for the entire value chain,” the authors stated.
Of the 20 largest global retailers, none had methane-specific targets – and US chains such as Kroger and Albertsons were among the poorest performers.
Missing methane targets
Food and agriculture are the biggest drivers of methane emissions globally. In agriculture, the gas – which is 80 times more potent than CO2 – predominantly comes from enteric fermentation, manure management and food waste in landfills. Animal agriculture alone accounts for almost two thirds (60%) of human-caused methane emissions, according to United Nations data.
For food retailers, methane forms almost one third of scope 3 (indirect) emissions, with meat and dairy being the largest sources of emissions.
But none of the 20 global supermarket chains examined in the report commit to a specific methane reduction target, or share product-specific emissions from meat and dairy.
“[I]t is striking that not a single supermarket in the 20 largest food retailers had a specific methane reduction target, either for their private label products or for their supply chain as a whole,” the report notes.
“Addressing methane emissions is not just about reducing climate risks; it is also an opportunity for supermarkets to position themselves as leaders in the transition to a sustainable food system.
“Setting specific targets for reducing methane emissions, publicly reporting on progress, and investing in innovative solutions can help retailers meet the expectations of all stakeholders, including consumers, policymakers and investors.”
In addition, only 6 of the 20 retailers had scope 3 emissions targets in place – with Dutch multi-national Ahold Delhaize leading the way with a 37% scope 3 reduction target by 2030 (equal to 17.1 MtCO2e).
Migros, Rewe, Sainsbury’s and Tesco have SBTi-validated FLAG targets and have split their scope 3 emissions into FLAG and operational targets. These four retailers have also set scope 3 reduction targets of at least 50% by 2030.
In the US, Albertsons was found to be the only retailer to mention a target beyond scope 1 and 2, stating a reduction in ‘downstream emissions from the use of sold goods by 27% by 2030’, the report notes.
Aldi Sud – which operates in Australia, Austria, China, Hungary, Ireland, Italy, Slovenia, Switzerland, the UK and the US – has a FLAG target but not a long-term target for any of the scopes. However, almost all (99%) of Aldi Sud’s GHG emissions come from its value chain (scope 3), the retailer has disclosed.
How the supermarkets measured up
With no methane reduction targets to go by, The Changing Markets Foundation used other data, such as the availability of protein alternatives, details of commitments and action plans, food waste and landfill strategies, and emissions reporting data to evaluate the 20 food retail majors across 18 indicators.
A total of 100 points were up for grabs, with those scoring above 50 considered to be performing adequately.
Only British multinational Tesco managed that by securing 51 points. In fact, the top end of the table comprised exclusively of European retailers, with British (3) and German (4) chains dominating.
Lidl and Kaufland operator Schwarz Group came in second with 35 points; Switzerland’s Migros – in third with 34.5; French supermarket chain Carrefour was fourth with 34, and Dutch multinational Ahold Delhaize came fifth with 33.
J Sainsbury’s (31), Aldi Sud (28), Asda (25), Rewe (22) and Edeka (19) completed the top 10.
Kroger and Walmart (both with 9.5/100 points, in 14th and 15th place respectively) had the highest overall score among US retailers, with Costco (6/100), Publix (2.5/100) and Albertson (0/100) near the bottom of the table. Besides Albertsons, Spain’s Mercadona was the only other grocer to not score any points.
The category with the best result was food waste, which is ‘a small piece of the puzzle’ with respect to methane emissions, according to the authors.
Where US retailers fell short
Not a single US retailer scored full points on establishing a link between methane emissions from livestock farming and climate change: with Publix, Walmart and Albertsons performing the worst and Walmart being the only retailer to mention methane in relation to food waste, according to the non-profit organization.
Costco made inferences around the role of protein diversification, but stopped short of informing stakeholders of the impact of livestock farming, the report states.
Meanwhile, all German-based retailers plus Migros and Tesco address that link, hence their top-table finish.
In addition, no US retailer scored full points for emissions reporting. Costco scored half points for reporting on scopes 1, 2 and 3; Kroger did not report its scope 3; Walmart only reported an estimate for 90% of its scope 3 emissions, and Albertsons ‘appears to submit its emissions reports only to a non-profit organization that operates an environmental disclosure system, the report found.
“The lack of full transparency among US retailers reflects the systemic gap in corporate climate regulation and the urgent need for a stronger framework in the US at a time when climate regulation is being rolled back further,” the authors stated.
Measuring methane is a challenge for meat and dairy producers, too – with Danone being the only dairy company globally to have set science-backed methane emissions reduction targets so far. Others, such as the Bel Group and Lactalis USA, disclose their methane emissions, the report notes.
Reducing methane: it’s not so simple
In terms of how retailers could reduce methane emissions, the report mentions that chains could tweak their plant-based versus animal-based protein offering (to a mix of 60% vs 40%, as per the EAT-Lancet report) and publishing plant-based sales data to help more retailers understand the market’s potential to drive change.
But there’s another important argument that’s rarely discussed – rewarding senior executives for not only setting targets but also measurably acting on these.
Broadly, retailers also do not incentivize senior executives for progress against methane emissions reductions, the report concludes – with only France’s Carrefour having set a plant-based sales target (of €640m by 2026) as part of its corporate sustainability strategy.
“The absence of CEO and senior executive remuneration linked to successful progress on relevant climate targets suggests that companies do not place sufficient emphasis on them, or that there is a lack of confidence in the short-term targets and associated plans for which senior executives can be held accountable,” the authors stated.
“The trend of linking senior executive remuneration to climate goals has been on the rise in recent years, and given the increased shareholder interest in these issues,43 it is surprising that, with the exception of one retailer, none of the world’s highest-revenue food retailers are following this trend. A lack of senior-level accountability may be a key factor in the lack of progress outlined in this scorecard.”
In addition, just 5 retailers had sales targets for increasing plant-based product sales.
Price parity in own-label dairy and meat alternatives is another area with scope for improvement, the report notes – with a lack of publicly-available pricing policy making it difficult for shoppers to understand the value proposition of alt meat and dairy.
“Reducing the meat and dairy offer to curb scope 3 emissions should be a core strategy for every supermarket, and is critical to accountability for those with a net zero pledge. To do so, retailers need to focus on the areas of their business that produce the highest but most short-lived emissions, and tackle methane emissions from meat and dairy.
“By being clear and vocal with customers about the links to outsized emissions from meat and dairy products versus their plant-based counterparts, supermarkets could help consumers to make more informed choices.”
How is alt meat and dairy performing in retail?
Meat, fish, poultry and dairy remain staples in the UK consumer diet. According to Kantar, meat, fish and poultry is purchased by almost 99% of all consumers (Kantar, 52 w/e 12 May 2024) with cow’s dairy purchased by 99.4% of shoppers (Nielsen, 52 w/e 13 July 2024).
Meanwhile, plant-based dairy accounts for just a 5.1% share of total dairy volumes sold, with household penetration sitting at just 69.7% for the 52 w/e 13 July and with meat-free penetration dropping (-3.1ppt) to 40.7% (Kantar, 52 w/e 04 August 2024).
And while the plant-based dairy and meat volumes have been growing faster than that of total meat and dairy, the traditional products outperformed alternatives in actual volume terms.
Price increases in plant-based hasn’t helped dairy alternatives either; with traditional dairy prices growing just 1.7% in the 12 w/e 13 July 2024 (NIQ Homescan) versus 3.8% for alt dairy.
More recently, cow’s dairy volumes in the UK increased by 6.1% in January and saw volume increases in almost all product categories, while plant-based dairy sales increased by just 1%, with volume declines in nearly all plant-based dairy categories, including plant-based cheese, spreads and butter, the AHDB reported.
In the US, sales of milk alternatives in the year to July 14, 2024 fell 5.2% with units down 5.9%, according to SPINS. Meanwhile, dairy milk sales fell 2.1% to $17.2bn with units down 0.8% over the period.
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