For consumer industries, ~70% of the sector’s value chain impact comes from agriculture, which is the second largest driver of GHG emissions globally (including forestry and land-use). Failure to repair our broken agriculture system will leave us without enough natural resources, such as water and healthy soil, to make the products we rely on every day to feed and take care of ourselves and our families. What’s more, global food production alone could use up the world’s remaining carbon budget — causing the world to miss the IPCC’s critical 1.5C threshold.
As the deadline approaches for delivering 2030 and 2050 sustainability goals, it’s clear more work must be done: 93% of companies globally are at risk of not meeting net zero commitments. The world’s lack of progress on decarbonization (and nature) will only become more apparent during this year’s Global Stocktake to measure the world’s action towards net zero.
Adding to the environmental call-to-action, consumer industries’ approach to agriculture has serious social consequences — including availability of food, global health and nutrition, the resiliency of homes and communities to extreme weather events and the depletion of sanitary water resources. All in all, the hidden costs of our food system (i.e. on health and environment) amount to an estimated $20 trillion, more than double the value of the system itself ($9 trillion). Sustainable agriculture is therefore critical for transitioning towards a global food system that is better for the planet and better for you.
In the lead-up to COP30 in Brazil, companies must accelerate the systemic transformation of Food Systems. This transformation will be driven by a call-to-action of companies in the agriculture value chain to transition towards regenerative agriculture (“regen ag”) practices. Adding to the pressure, expanding ESG disclosure requirements (e.g., SBTi, TNFD) mandate companies to report on their full agriculture impact – moving beyond carbon to encompass nature and biodiversity, and a just transition.
Without serious and swift collective industry action companies will not be able to scale the regen ag practices needed to meet their net zero targets. Recent research from Accenture, in collaboration with the Race to Zero and Consumer Goods Forum member companies, reveals critical insights into the most pressing challenges companies face when implementing and scaling regen ag programs. These challenges demand our attention, and there are opportunities to address them – the time to act is now.
Overcoming challenges & scaling regen ag
73% of surveyed CGF member companies find embedding regen ag practices into sourcing and procurement to be one the biggest challenges. This is especially true for large manufacturers with widespread and far-reaching supplier networks. Companies also struggle to determine which technology solutions are scalable and which collaborative initiatives to join — a task made complicated by the proliferation of technology platforms and alliances already out there (as part of our work with CGF Race to Zero Taskforce companies, we co-created the Climate x Nature x Ag ecosystem map to tackle this challenge – a curated selection of industry assets to help companies decode and accelerate action on land & ag impacts). Another major hurdle is the pursuit of adequate funding to activate and scale ag solutions: 75% of companies are struggling to navigate soaring technology costs. In addition to technology costs, 47% of companies face capital constraints both internally and externally.
It’s clear that companies are stuck navigating significant internal roadblocks spanning complexity and cost. So how can companies get unstuck? Accenture research and insights from CGF member companies reveal the top internal enablers needed to accelerate your regen ag strategy – starting with operationalizing teams, ensuring on-farm technology interoperability, enabling access to financing, and establishing partnership networks.
Operationalizing the transformation
The first step is to have a well-structured strategy that integrates regenerative practices into sourcing. Strategies should include ambitious commitments, seek out suppliers who are aligned to those commitments and support the upskilling of suppliers who wish to improve. As an example, HEINEKEN’s ambition is to reach net zero across the value chain by 2040 – with agriculture representing 19% of its current carbon footprint. Ambitious targets like this have been key to effectively operationalizing sustainability goals. One of HEINEKEN’s first steps in driving systemic change in agriculture is its “Low Carbon Farming” programme. In 2022, with 200 pilots in 13 countries, HEINEKEN worked collaboratively with farmers to leverage sustainable agricultural practices, obtaining an average 13% reduction of carbon emissions and 81% improvement of carbon sequestration. They aim to reach at least 500 pilots in different regions by 2025. The next step in HEINEKEN’s journey will be to amplify their carbon-centric approach to a more holistic view: regenerative agriculture. Their first regenerative agriculture project has started in Ireland, involving partners Pernod Ricard, Irish Distillers, Boortmalt, and Earthworm. By adopting regenerative agricultural practices, farmers will progressively restore and improve the ecological balance in their fields.
In addition to empowering suppliers, companies must equip internal teams with the right training and resources to create a motivated and strong culture for sustainable transformation. One French multinational food & beverage company, for instance, manages a centralized, cross-functional regen ag team that coordinates with local teams to identify funding and implementation partners for individual projects. The key unlock is collaboration with partners and securing external funding which in turn makes it easier to earn buy-in from internal stakeholders. However, in the absence of clear regulations, Consumer Packaged Goods (CPGs) are forced to rely on voluntary reporting and certifications to guide project implementation, which makes enforcing adoption and transparency along the supply chain particularly difficult.
Harnessing tools & technology for on-farm activities
Technology is our ally in revolutionizing sustainability, and agriculture is no exception. There are many opportunities for leveraging technology in regen ag – integrating on-farm data and enabling farm-level transparency, employing blockchain for traceability, using digital product carbon footprints to advance monitoring & reporting – the list goes on. However, interoperability (i.e., the ability to make use of information cross-functionally) remains a significant challenge. While numerous tools exist, there is no out-of-the-box, one-size-fits-all solution because on-farm requirements are vastly different across commodities, regions, and end-users. To illustrate, AHOLD DELHAIZE emphasized how the many tools being developed in this space are often too complex for suppliers, especially for small-scale farmers. Further, a lack of customization (e.g., for market- or crop-specific nuances or to enable integration with financial data) makes it difficult to glean company-specific, or even regionalized, data and insights
Accessing finance and mitigating risk
A key strategic enabler, yet a major gap, is innovation in how companies access project financing and create incentives for regen ag. Companies should tap into alternative revenue / capital structures to fund innovative programs. Promising funding opportunities for regen ag include blended finance mechanisms (i.e., mobilizing private capital flows towards emerging markets), data-driven financial technology (“fintech”) solutions, alongside forming strategic alliance(s) with institutions / foundations that can help ensure long-term capital viability. Take HEINEKEN who, to expand the level of adoption and impact, is working jointly with suppliers – has developed and presented funding applications to government bodies to co-fund on-farm crop rotation and to facilitate the sustainable agriculture transformation”.
Ultimately, the success of a program hinges on supporting supplier livelihoods e.g., with capability-building, funding and incentives. This support requires significant company investment. A British multinational retailer, for example, is exploring carbon incentives (e.g., sustainably linked pricing schemes) as a means to compensate suppliers that adopt sustainable ag practices. However, proving the business case for such incentives depends on supplier information which can be difficult to obtain and verify.
Building collaborative networks
Collaboration accelerates and multiplies the impact of sustainability initiatives, especially for consumer industries, whose value chains are wide-spread. The degree of system-wide change needed — to create alignment, establish required infrastructure, de-risk investments, etc. — is insurmountable without cross-functional collaboration across NGOs, government bodies, research institutions, suppliers and industry peers. The level of trust and cooperation needed across the industry goes beyond pledges and individual pilot programs. For example, A US-based multinational snack & beverage company has found confidence through their engagement with the Midwest Row Crop Collaborative that their collective investments are actually turning into tangible value, and that it is far cheaper to implement shared projects vs. doing the same thing individually.
With so many existing alliances and initiatives, prioritizing which ones to join can be daunting. GENERAL MILLS, for instance, has found it important to identify partners whose Theory of Change (e.g., whether place-based, landscape-level approach) is aligned with the impact they want to achieve. General Mills partnerships include on-farm research groups, conservation organizations and universities, to help determine the most applicable methods for improving regen ag practices locally. Engaging at the local level to build capabilities and solutions is the right approach. However, it can be difficult for companies to justify such investments in the absence of a clear way to measure and reflect results.
Towards COP30
In the pursuit of enabling the transition to regen ag, we must remind ourselves of the urgent need to transform our Food Systems – not only to ensure the health of the planet and businesses, but of ourselves and our communities. By COP30, consumer industries must be ready to respond to the call-to-action to accelerate the systemic transformation of Food Systems – changes critical to the longevity of consumer industries and for safeguarding the many natural resources we depend on.
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About Race to Zero
Race to Zero is led by the UN Climate Change High-Level Champions, who engage non-State actors to support governments in delivering the goals of the Paris Agreement. Working with the Marrakech Partnership – a global alliance of more than 320 major initiatives and coalitions – the High-Level Champions enhance the ambition of cities, regions, businesses and investors and other non-State actors, to collectively race towards a fair, resilient and zero carbon world.
About The Consumer Goods Forum
The Consumer Goods Forum (“CGF”) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 4.6 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises more than 55 manufacturer and retailer CEOs. For more information, please visit: www.theconsumergoodsforum.com.
About Accenture
Accenture is a leading global professional services company that helps the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale. We are a talent and innovation led company with 738,000 people serving clients in more than 120 countries. Technology is at the core of change today, and we are one of the world’s leaders in helping drive that change, with strong ecosystem relationships. We combine our strength in technology with unmatched industry experience, functional expertise and global delivery capability. We are uniquely able to deliver tangible outcomes because of our broad range of services, solutions and assets across Strategy & Consulting, Technology, Operations, Industry X and Accenture Song. These capabilities, together with our culture of shared success and commitment to creating 360° value, enable us to help our clients succeed and build trusted, lasting relationships. We measure our success by the 360° value we create for our clients, each other, our shareholders, partners and communities. Visit us at www.accenture.com.
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