Global beverage companies need to increase the rate at which they are reducing greenhouse gas emissions by 11-fold if they are to meet their net-zero targets.
A new analysis by consultancy Kearney found that in 2021, beverage companies emitted 1.5 billion tonnes of CO2e, representing 3.8% of all global CO2e emissions, down just 2.5% from 2018.
Based on the current trajectory the industry will miss both 2030 and 2050 targets for greenhouse gas emission reduction, according to the analysis.
The industry is doing better when progress is measured by emissions per litre, which are down 6% from 2018 to 2021. But this still falls someway short of targets.
Kearney tracked the emissions of leading beverage companies based on their public filings and extrapolated the emissions for the entire beverage industry. It found the dairy industry alone accounted for 45% of total beverage industry emissions (0.7 billion tonnes of CO2e). Together, dairy products, soft drinks, beers, and ciders made up more than 80% of all emissions.
Emissions from raw and packaging materials were the biggest contributors to beverage industry emissions accounting for 58% of the total.
Kearney said the lack of progress is not a reflection of the industry’s reticence to change, “but rather is evidence of exactly how tough a problem this is to solve”.
In addition to the environmental cost, it said failure to achieve net-zero goals can negatively impact the industry in the form of “draconian regulation, cratering stock prices, and a loss of credibility in terms of activists, the media, and consumers”.
To effectively reduce overall emissions, Kearney said beverage companies need to actively enable and support their value chain partners in adopting sustainable practices. “Beverage companies need to reach out to their suppliers and help them find and develop decarbonising solutions that are cost beneficial for both sides,” it said.
Examples of necessary actions include reducing emissions linked to raw materials by adopting more regenerative agricultural practices; reducing packaging emissions by focusing on reduction, redesign and reuse; and greening operations and transportation through, for example, moving to electric assets powered with renewable energy.
All is not lost for the sector – by implementing a holistic set of methods, Kearney said beverage companies can achieve their net-zero targets by 2039 in its “aggressive” scenario, or by 2045 under a more realistic, less stringent timeline.