Ceres Launches Program to Help Food Sector Reach Paris Agreement Goals

The group says the global food system accounts for one-third of the world’s emissions, and it wants institutional investors’ help to engage the highest polluters.

Sustainability nonprofit organization Ceres has launched an initiative to engage 50 of the highest-polluting publicly traded food and agriculture companies in North America to set goals toward achieving net-zero greenhouse gas emissions.

The initiative, called Food Emissions 50, will involve institutional investors seeking commitments from companies to disclose greenhouse gas emissions across their entire value chain and to set science-based emission reduction targets aligned with the Paris Agreement.

Ceres said it is targeting the food sector because the world’s food system is responsible for approximately one-third of all global greenhouse gas emissions. It said the majority of the emissions are embedded in the production of key agricultural commodities and fall under scope 3, or indirect, emissions from the supply chain for companies that source, manufacture, distribute, and sell agricultural or food products.

According to Ceres, reaching the Paris Agreement’s goal to limit global temperature rise to no more than 1.5 degrees Celsius above pre-industrial levels will not be possible without a significant cut in the food and agriculture sector’s greenhouse gas emissions.

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“High-emitting food companies have a significant role to play in achieving a net-zero emissions economy,” Julie Nash, director of food and forests at Ceres, said in a statement. “Moving top North American food companies to disclose and reduce supply chain emissions will have considerable ripple effects in the global food and agriculture sector.”

In conjunction with the launch of the program, Ceres published an investor statement of support, and a list of the 50 companies it plans to engage. Ceres said because disclosure of full value chain emissions in the food sector is weak, it selected companies based on their high market capitalization and their exposure to the highest-emitting agricultural commodities. The organization also released an initial benchmark analysis of the companies’ scope 3 emissions disclosures and emissions reduction targets.

Ceres also developed a common high-level agenda for companies to cut emissions across the food supply chain. Specifically, the boards and senior management of the targeted companies will be expected to:

Disclose greenhouse gas emissions across their entire value chain and set science-based emission reduction targets aligned with the Paris Agreement;
Develop and disclose comprehensive climate transition action plans for reducing emissions in line with what is needed to limit warming to 1.5 °C; and
Implement the actions identified in those plans and disclose progress.

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Tags: Ceres, Climate Change, Food Emissions 50, Greenhouse Gas Emissions, Net Zero, Paris agreement

For a long time, the usual behemoths have ruled the stock market: Facebook, Apple, Microsoft, Amazon, and Google-parent Alphabet—collectively known as FAMAG.

Last Friday, with the release of a strong jobs report, these big kahunas mostly dipped—Facebook was minutely ahead—while the overall S&P 500 advanced 0.17%.

To Jim Paulsen, chief investment strategist at the Leuthold Group, tech stocks are in danger of losing their market leadership amid investor clamor for smaller offerings. The robust gain in jobs last month should bring new energy to the economy, which in turn would filter down to the less-renowned quarters of the stock market. “You’ll see a movement to cyclicals and small caps and away from defensive and growth stocks,” he said.

This comes after the giants scored enormous earnings in the second quarter. Together, their revenue increased 36%, to $332 billion, a pattern set when the pandemic started last year.

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The monsters have slipped out of leadership before, albeit not for long. Earlier this year, the Nasdaq 100—of which the FAMAG stocks are the most prominent members—encountered back-to-back drops: from mid-February to mid-March (down 10.9%) and from late April to mid-May (off 7.2%), as Washington and other nations’ governments made noise about curbing their power. Since then, the index of Nasdaq’s largest stocks has vaulted 16%.

Should another tumble be in the offing, the propellants likely will be that investors aren’t crazy about the huge price/earnings ratios that the biggest tech players command, Paulsen noted. What’s more, assuming that COVID’s Delta variant doesn’t harm economic growth too much, the smaller stocks are coming into their own, thanks to more money available via earnings increases across the board, he added. Plus, he said, he doubted that bond yields will rise much more and thus divert investment dollars away from the stock market.

Paulsen pointed to the 11% rise in gross domestic product (GDP) over the 12 months ending June 30. “Even if it goes down to 6%, that’s better than in recent decades” and should leave enough for the smaller stocks to flourish, he argued.