Climate change impacts are expected to push up the price of everyday foods like breakfast cereals, and the world's biggest brands should act to reduce the planet-warming gases emitted during their production, Oxfam said on Tuesday.
In a report, the international aid group said the world's "big 10" food and beverage companies were responsible for nearly 264 million tonnes of greenhouse gas (GHG) emissions in 2012 - more than Finland, Sweden, Denmark and Norway combined.
Around half the total comes from the production of agricultural commodities in the companies' supply chains, such as maize and soy. But those indirect emissions are not covered by targets the firms have set to lower their emissions, which are restricted to their own operations and the energy they use.
"The food industry has a moral imperative and a business responsibility to dramatically step up its efforts to tackle climate change," said Oxfam's executive director Winnie Byanyima. "The 'big 10' companies are failing to use their power responsibly and we will all suffer the consequences."
Those consequences include rising prices for consumers. For example, Oxfam's research calculates that climate change alone will drive up the retail price of General Mills' Kix cereal by up to 24 percent and Kellogg's Corn Flakes by as much as 44 percent over the next 15 years.
Meanwhile, the companies themselves are - by their own admission - already suffering financial costs from climate impacts including floods and droughts.
In March, General Mills' CEO said wild weather had dampened sales and cost the company 62 days of production over three months. And Unilever says it loses around $415 million a year due to extreme events such as flooding and extreme cold, according to the Oxfam report.
Yet despite growing evidence that climate change is bad for business, well-known brands aren't yet doing enough to tackle their own contribution to global warming, Oxfam argues. Unilever, Coca-Cola and Nestle are relatively assertive in their policies and actions to curb climate change, while Kellogg and General Mills are two of the worst, it said.
The international food system accounts for 25 to 27 percent of global emissions, including from the deforestation caused when farm land expands, and these emissions are growing as demand for food rises, Oxfam said.
The report called on the "big 10" - Associated British Foods, Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelez International, Nestlé, PepsiCo and Unilever - to start measuring and setting targets to reduce emissions that occur "outside their own four walls".
"Companies must use their supplier codes (of conduct) to require suppliers to measure and disclose GHG emissions, and to establish clear, quantifiable reduction targets," it said.
All 10 companies investigated in the report have recognised the need to reduce indirect agricultural emissions in their supply chains and seven of them already annually measure and report on these emissions through the Carbon Disclosure Project. The exceptions are Kellogg, General Mills and Associated British Foods.
Unilever and Coca-Cola have committed to targets to reduce emissions in their supply chains, Oxfam said. But none of the 10 have clear goals specific to their agricultural emissions, nor do they require their suppliers to set targets to reduce emissions, it added.
ECOLOGICAL FARMING METHODS
If they replicated a promise made by PepsiCo UK to cut its carbon emissions by 50 percent over five years, Oxfam estimates the 10 brands would be capable of cutting their combined emissions from agriculture by 80 million tonnes by 2020 compared to business as usual - the equivalent of taking all cars off the road in Los Angeles, Beijing, London and New York.
Tim Gore, Oxfam's head of policy on food and climate change, urged companies to first become more transparent about the emissions produced in the cultivation of their raw materials, and then agree to tackle them. The next task would be to figure out appropriate targets for emissions reductions, he said.
Most of the global brands on Oxfam's list have now pledged to source palm oil - a cheap, edible vegetable oil - sustainably in the next few years. That means they will not use palm oil that is grown on deforested land and peatland, or on plantations that exploit the rights of workers and local people.
The Oxfam report called on the companies to extend their commitments to other key commodities that are driving deforestation, like soy, sugarcane and maize.
Evidence shows that levels of agricultural production can be maintained while reducing emissions from farming, the report said. "In particular, companies should support farmers and smallholders to use ecologically restorative farming practices that avoid land-clearing, synthetic fertiliser use, and other sources of greenhouse gases," it added.
Gore said moving away from industrial agricultural practices would be a "profound shift" that "obviously won't happen overnight". But investing in more sustainable, resilient farming methods is in the interests of big food and drink companies "in terms of protecting their investments and making sure that their supply chains continue to deliver as climate change picks up", he added.
"If they are successful, they could provide a model for the future of sustainable and equitable food production, helping the world reach a target of zero hunger, in a safer climate," the report concluded.
The research was issued as part of Oxfam's "Behind the Brands" campaign, which advocates for the world's top food and drinks companies to strengthen their social and environmental policies.